GNPC MISSING $3M POPS UP

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Tuesday, September 17, 2013

It has emerged that the Ghana National Petroleum Corporation (GNPC) knew about the sale of Ghana’s Discoverer 511, the corporation’s Drill Ship that was auctioned in July 2001 to liquidate judgement debt owed to Societe Generale.

Three million dollars of the proceeds from the sale were initially said could not be traced because of the missing documents.

However, at the yesterday hearing of the Judgement Debt Commission, GNPC back tracked from its initial position that it was not aware about the selling of its drill ship at the amount of $22.5million which $19.5million was paid to Societe Generale.

GNPC Chief Executive, Nana Boakye Asafu-Adjeye last week told the Sole-Commissioner Justice Yaw Apau of the Court of Appeal that the corporation could not furnish the commission with documents relating to the $19.5 million judgment debt payment to Societe Generale because all the files on it had been presented to the Attorney-General.

However, when he appeared again at the Commission of Enquiry set up by President John Dramani Mahama to investigate the payments of Judgement Debt (JD) by the state, the GNPC boss made a quick about-turn admitting “we knew about the sale of the Drill Ship.”

Since the issue of the whereabouts of the Discoverer 511 hit the media headlines, it has spread like wildfire and as usual the two leading political parties have mounted aggressive campaigns to defend their actions in the whole transaction.

The commission was told that the drill ship was sold somewhere around 1999-2001 for $22.5million and out of the amount, $19.5million was paid to Financial Services Group Societe Generale as judgment debt against the GNPC after the state-owned oil company was sued in a London court for breaching a contractual agreement signed during the tenure of Tsatsu Tsikata in the 1990s loan guaranteed.

The remaining $3million was said to have been paid into an escrow account at the Bank of Ghana but initial information suggested that the whole transaction had been shrouded in secrecy until the commission started subpoenaing all the agencies involved in the whole deal.

Archives

Appearing for the second time in about a week yesterday, the GNPC boss who had earlier created the impression that the corporation had not been involved in the sale of its own drill ship said that after going through the archives he had found documents that suggested that the corporation was involved in the transaction.

He submitted a financial statement indicating how the GNPC account was managed at the time and added that the disposal of petroleum production equipment as captured in the statement might not refer to the Drill Ship since the corporation also had other marine assets.

Nana Asafu-Adjeye then called in Peter Kignsford Osei Sasu, Chief Accountant of the GNPC to throw more light on the financial statement and he in turn told the Sole-Commissioner that on profits on disposal of fixed assets the value would not be stated since the statement only showed the balancing figure.

He said that GNPC knew about the Discoverer 511 transaction because the Ministry of Energy at the time offered them advice.

Asked by Dometi Kofi Sorkpor, counsel for the commission why the balance of the transaction was charged in the government’s account and not that of GNPC, Mr. Sasu said “it was because GNPC did not get the full revenue.”

Amissah-Arthur Question

Then came a name called K.B. Amissah-Arthur (whom many suspect is the current Vice President whose full name is Kwesi Bekoe Amissah-Arthur) and the role played by the said individual and Nana Asafu-Adjeye said the said individual was a Senior Petroleum Engineer at GNPC.

The GNPC boss confirmed that in one of the correspondence covering the transaction, a letter was written and attentioned KB Amissah-Arthur.

Nana Asafu-Adjeye confirmed that the Discoverer 511 was used as collateral and said that the Attorney General’s Department got involved in the case at some point in time.

He said that he could not confirm if at the time the judgement was given, GNPC’s legal team not part of the case adding “it was a default matter that was not seriously contested.”

Nana Asafu-Adjeye said the GNPC made inputs in the sale saying “there was a letter from the acting CEO requesting us to corporate with the Deputy Minister in the sale.”

When asked how much was realized in the sale the GNPC chief said “we received a letter from the Deputy Minister, detailing the sale and how much was realized.”

He said that he did not know if the balance was remitted to the GNPC since some were put in escrow account.

“We did not verify the authenticity. All we did was at the behest of the ministry.”

He said at first he had no document he told the commission that GNPC was not aware of the transaction.

He said he needed to discuss with the finance department of the GNPC on questions of whether or not they were in agreement with the auditors of the corporation’s accounts and could not give an off-head answer.

He also said he was with the GNPC in the 1990s but was relieved of his position in early April 2001 adding “I cannot tell specifically who took the decision to sell the D511.”

Initially, Nana Asafu-Adjeye had said that the transaction might have gone ahead with an approval from the board of directors of GNPC but when a staff brought in a document that seemed to suggest that the board was constituted in September 2001 and could not have been in place in July when the ship was auctioned, he said “I will still have to check because I am not too sure about that. If it was done without the board’s approval then it would not have been the best.”

Chief Director

Chief Director of the Ministry of Energy, Prof. Thomas Mba Akabzaa also made a second appearance before the commission after initially indicating that until the subpoena, he did not know anything about the case.

He said he had cited some documents but many of them did not directly involve the sale.

Rather, he said the documents he found related to the expenditure of the proceeds after the transaction.

“The transaction took place mainly in the Minister’s office,” he claimed adding “it did not go through the normal bureaucracy associated with the work at the ministries.”

He said that they could not trace the file covering the transaction adding “issues of the drill ship was never discussed even in the Minister’s handing-over notes.”

Kan Dapaah’s Take

In a related development, Albert Kan Dapaah who was the Minister under whose tenure the ship was sold has sought to explain his part of the story.

He was at the commission’s sitting yesterday and Justice Apau duly acknowledged his presence and told the audience that he had received a letter from Mr. Dapaah and was going to study and invite him at the appropriate time.

In Mr. Dappah’s letter, he said “I am compelled as the first Minister of Energy appointed by His Excellency Mr. J.A. Kufuor under his government and the substantive Minister of Energy thereof when the aforementioned drill ship was sold to write to your commission to set the records straight.”

He said that upon assumption of office in January, 2001, the government realised that GNPC had lost focus of its core mandate and run up debts inter alia which had dire consequences for the economy of Ghana.

“GNPC could not even pay its own staff such that staff of GNPC will on a monthly basis storm the offices of the Ministry of Energy amidst drumming and singing to demand salaries.

As Minister of Energy, I immediately set out to streamline GNPC's operations to ensure its sustainability with the consent and approval of H.E. J.A. Kufuor and cabinet. Among other steps taken then was the setting up of a committee to restructure GNPC, staff redundancy
inter alia.”

“In the course of the restructuring of GNPC, the Ministry of Energy's attention was drawn to litigation between Societe General (SG) and GNPC in an overseas court where SG had sued for the recovery of a debt of Forty Seven Million United States Dollars ($47,000,000) from GNPC.

“The said debt arose from some derivative transactions entered into by GNPC to manage oil price risk in anticipation of the production of oil from the Tano fields.”

SG in pursuance of its claim he said sought and obtained orders from the courts to arrest the Discoverer 511, which was then on duty in the waters off Oman and actually arrested the vessel. The vessel had been used as collateral for credit facility GNPC had obtained from SG.”

“Alarmed by this development, the government of Mr. J.A. Kufuor after thorough deliberations came to the conclusion that if it allowed the Discoverer 511 to be sold in satisfaction of the judgment debt, SG may sell it for less and thereafter still proceed to attach any properties belonging to the Republic of Ghana for sale to make up any shortfall in the judgment debt sum.

Thus, Hon. K.T. Hammond, then Deputy Minister of Energy was mandated to open negotiations with SG for and on behalf of the Government of Ghana (GoG) in respect of a reduction in the judgment debt to be paid and the sale of the Discoverer 511.”

“Following extensive negotiations with SG, GoG managed to reach an agreement with SG to pay it Nineteen Million Five Hundred Thousand United States Dollars ($19,500,000), thereby saving GoG Twenty Seven Million Five Hundred Thousand United States Dollars
($27,500,000.00).”

“Upon reaching the agreement in respect of the negotiated sum of Nineteen Million Five Hundred- Thousand United States Dollars ($19,500,000), GoG made a request of SG for it to be allowed to sell the vessel and pay the negotiated sum to SG. SG rejected the request of GoG to be allowed to sell the Discoverer 511 and pay SG on ground that it could not guarantee that GoG will pay it the negotiated sum if it was allowed to sell the vessel. GoG and SG then reached an agreement to sell the vessel and pay the proceeds into an escrow account to be operated by lawyers of both SG and GoG and a representative of SG and Hon. K. T. Hammond as representative of GoG. The sale itself was conducted jointly by the solicitors of SG and GoG with the active involvement of GNPC.”

“The vessel pursuant to the aforementioned understanding between GoG and SG was sold for Twenty Four Million United States Dollars ($24,000,000) out of which sum SG was paid its 'entitlement of Nineteen Million Five Hundred Thousand United States Dollars ($19,500.000). The UK lawyers who worked on the transaction were paid One Hundred Thousand United States Dollars ($100,000.00) for their services. A cheque of Three Million Five Hundred Thousand United States Dollars ($ 3,500,000.) in the name of GoG was also paid to the Ministry of Finance.”

“GNPC made representations to the Ministry of Energy that it owed certain individuals and institutions who had-done work and/or provided services to the vessel and desired that the remaining sum of Nine Hundred Thousand United States Dollars (US$ 900,000) will be used to pay off some of the debts owed those individuals and companies. The Ministry of Energy in its response asked GNPC to submit claims regarding those individuals and companies for vetting; following which all 'claims that were passed as genuine were forwarded to the signatories of the escrow account for payment.”

Mr. Dapaah stressed that there was no aspect of the transaction that was kept secret and not 'made mown to Ghanaians at the time. There was a press conference to inform Ghanaians about details of the transaction.

“I have furnished these facts to the Commission as part of my duties as a citizen of the Republic and also as; the Minister of Energy during whose tenure these events that have become the subject matter of intense public commentary took place and not for any collateral effect”.

He said he was ready and willing to appear before the Commission to testify in respect of the contents of this memorandum and may be reached.