STC Grounded

Posted on: www.businessguideghana.com

By William Yaw Owusu

Tuesday October 2, 2012.

Intercity STC, once a preferred transport company in the country, has lost most of its buses.

Currently, Intercity STC is indebted to banks, institutions and suppliers in the region of GH¢ 43,000,000.

Prudential Bank, for instance, is in the process auctioning Intercity STC, while the beleaguered state-owned has made special arrangement to pay GH¢ 7,500 to JA Plant Pool weekly for defaulting in the supply of buses.

To make matters worse, VCL Bulk Haulage, a subsidiary of Intercity STC, which was bringing revenue to the company, was turned into Trust Logistics early this year by its majority shareholder, Social Security and National Insurance Trust (SSNIT) in Tema.

The Minister of Transportation, Alhaji Collins Dauda stated categorically that he would suggest to government to stop running the transport company.

This was after management of the company approached the government to provide it with about GH¢7 million to remain solvent until December 2012.

Overwhelmed by the lack of interest by all the stakeholders, the Senior Staff Association of Intercity STC held a news conference in Accra to throw more light on the issues.

Joseph Addo, Secretary of the association, said they had petitioned relevant authorities including President Mahama, the sector ministry, key shareholder SSNIT, ISTC Board and the TUC to draw their attention to the current state of the company but to no avail.

“Intercity STC is on the verge of collapse. We, the workers of ISTC, have invited you here to lay bare the precarious situation that the state-owned organization finds itself now,” he said.

“We want to call on the government to take steps to rescue the dying company from its present state in view of the 80% shares it has taken over from SSNIT as a 100% shareholder.” 

He said the debts were incurred as a result of mismanagement under the previous leadership, lack of capital and re-investment by Government and SSNIT, inefficiency and ineffectiveness of the previous board headed by Sekyi Abankwah.

The secretary further said that the “lackadaisical attitude of the current board, conflict of interest by some members of the board and lack of due diligence before the acquisition of Chinese buses by the previous Board were part of Intercity STC’s problem.

He said Prudential Bank obtained a court order to auction the company’s properties on October 3, 2012 to defray its loan of 3.8 million dollars which according to them was used to purchase the Chinese buses during the tenure of the Managing Director of Prudential Bank who was the then Board Chairman.

He claimed Intercity STC buildings were used as collateral without the consent of the shareholders, adding, “We are appealing to the government to intervene by investigating the transaction under Mr. Abankwa which has brought about the impending sale of our premises in Accra.” 

“All our activities have suffered greatly as a result of the intended auction. Indeed, valuation, passenger tickets sales and parcels our main stay or activities have all reduced drastically rendering our premises as cemeteries where no life exists.”

“We have entered into the fourth month without salary. As if this is not enough, we have the uncertainty of coming to work no more from Wednesday 2012. Our situation has been aggravated by closure of the Ghana – Abidjan border due to the crises. All these needed urgent attention.”

They renewed their call on the government to intervene before the October 3 auction and inject capital or look for strategic investors for partnership.