FIREWORKS AT JUDGEMENT DEBT HEARING

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Thursday, July 3, 2014

There were fireworks at the Commission of Enquiry investigating the payment of judgement debts when the Managing Director of Africa Automobile Limited (AAL) testified about debts owed to his company by the government for services rendered.

Documents available to the commission indicated that the debts owed by the government to AAL stood at GH¢145,917.76 but the debts ballooned to GH¢8.3million in 2010 as judgement debt due to compound interest on the debt.

Furthermore, in the 2006 audited report of the company, the amount owed by all AAL debtors including the Ministries, Departments and Agencies (MDAs) stood at GH¢96,823.51 but when the company sued in 2006 they claimed that the total debt owed by the MMDAs was GH¢145,917.76.

Unfortunately, when AAL filed the suit against the government, the Attorney General did not contest the matter compelling the Commercial Court to enter a default judgement in favour of the claimant.

Yesterday when Mohammed Hijaazi, Executive Chairman and Managing Director of AAL appeared before the commission, he confirmed that AAL had indeed been paid GH¢ 8.3million as judgement debt and justified the payments.

He said AAL provided services as well as supplied spare parts to 17 MDAs from 1994/95 to 2010 but the government failed to pay for them and that compelled them to go to court.

He said that apart from the 4% compound interest charged, the MDAs had signed an agreement that indicated that AAL reserved the right to adjust the interest, charge 5% for what he called ‘loss of opportunity’ as well as charge 1% administrative cost.

Sole Commissioner Justice Yaw Apau as a result, requested Mr. Hijaazi to provide the agreement signed by each MDA with AAL which he promised to submit.

Counsel for the commission, Dometi Kofi Sorkpor then asked Mr. Hijaazi whether he paid GH¢6.1million as tax on the GH¢ 8.3million collected as indicated by the Ghana Revenue Authority but the witness said he did not intend to pay.

“The interest was a loss that the creditor suffered at the hands of the MDAs and I would not declare that as a loss. I have not and I would not. It was a loss and not profit,” he insisted and when the commission’s counsel asked him whether AAL sued for loss of business he said “No, I haven’t. In fact you have reminded me now and I am going to do that.”

“For 15 years, we have been reminding the MDAs of their contractual obligation but they did not but here I am today trying to make my claims and I am being branded a criminal,” Mr. Hijazi lamented.

Sole Commissioner Justice Yaw Apau then told him that “nobody is imputing criminality on your part or your company,” but added that “we are only interested in how GH¢145,917.76 became GH¢8.3million…that is what we are looking for.”

Earlier, Roland Modey Acting Chief Director of Ministry of Employment and Labour Relations flanked by Paul Opoku, a lawyer at the ministry testified in the case and said the funds were lodged in the ministry’s account to pay the AAL even though, the ministry was not indebted to the company.

He said the GH¢8.3million judgement debt was astronomical and added that there should have been simple interest instead of the compound interest charged.

The ‘Commission of Enquiry into the payment of Judgement Debt and Akin’ under C.I. 79 to investigate the frivolous and dubious payments of huge monies to undeserving individuals and companies, was appointed by President John Dramani Mahama after public uproar over the payments in what has now come to be termed as Judgement Debts (JD).

Notable among them were payments made to CP (€94 million) and the never-ending case of GH¢51.2million parted to the self-styled National Democratic Congress (NDC) financier, Alfred Agbesi Woyome, both of which many believed were dubious and frivolous.