GOV'T DIVESTED STATE-OWNED COMPANY FOR FREE

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Monday, August 25, 2014

It has emerged that the government divested the Medie Horticultural Development Company Limited (MHDC) located at Medie near Nsawam without getting a pesewa from the transaction. 

In 1998, Ghana Fresh Produce Limited which has bought MHDC executed MoU with the government for them to work together towards executing a joint venture agreement to process, package and export horticultural products.

“We did not receive any money from that divestiture. We had a situation where the government took our shares and the other person also did but did not pay anything,” Asakkua Agambila Executive Secretary of the Divestiture Implementation Committee (DIC) told the Commission of Enquiry investigating the payment of judgement debts yesterday.

The acquisition

He said “it is not clear from the record whether there was any acquisition. However, by 1972 the government passed legislative instrument of (State Lands Medie near Nsawam – Site for Central Horticultural Experimental Station and Dam) E.I. 104 to formalize the presence of the Ministry of Local Government and Parks & Gardens on the land.”

“The subject-matter of the acquisition was stated as being 359.86 acres. Subsequently, the Director of Survey did his mapping on the ground and disclosed that the land was actually more than 359.86 acres and that it was actually 538.856 acres. It is as a result of this discrepancy that the E.I. 104 of 1972 was amended in 2000 into E.I. 23 and the acquisition now reads 538.856 acres.”

Flurry of claims

According to Mr. Agambila, records showed that claims were lodged for 427.79 acres of that said land and added that “another 62.7 acres were noted as conflicting claims.”

He said “for 111 acres, there were no claims at all as at 2001 and by 2002, the issue of compensation started to generate. The value for the land as at 2001 was GH¢365,074.80.”

He said due to conflicts associated with the claims, the SFO now EOCO came into the matter in 2002 and came to the conclusion that only 10 of the claimants had been cleared and they were all entitled to a payment of GH¢225,799.86.

“It was only a recommendation. The payments were not effected and by 2004, the claimants continued to harass the ministry for their money and the sector minister set up a committee to set out the issues.”

Pre divestiture period

He said from 1965, the land had been occupied in one form or the other by the ministry acting through Parks & Gardens and by 1972 it had been formalized.

Mr. Agambila said from 1972, MHDC started partnering Parks & Gardens saying “60%  of MDCH was owned by a company called Nexus Produce Limited from South Africa; another company called Alpha Beta Limited owned 20% and John Lawrence Farms owned the other 20%.”

“Subsequently, another company called Ghana Fresh Produce Limited who had one John Kwasi Opoku Acquah as it Chairman acquired MHDC. It was at this stage that divestiture of the company came into the picture.”

He said MHDC did not own the land but worked with Parks & Gardens before the divestiture in 1998 adding “we at DIC do not know the arrangement that existed between the two.”

Joint venture

He said that under the joint venture agreement, the government owned 26%  while 74% was held Ghana Fresh Produce Limited.

“The 24% was evaluated such that the government’s share became the value of the 538.856 acres, the civil infrastructure, agricultural products and the equipment on the land,” adding “in the joint venture agreement, the government warranted that it had un-incumbent rights of entry, possession and user of the assets and land;  and on their part, the 74% holding was valued at GH¢203,769.77.”

The worry

The DIC Executive Secretary said “I am not in a position to understand this equity distribution because if 74% was equal to GH¢203,769.77 then 24% would make it next to peanut being the value of the land when the land had been valued at almost ¢4billion at that time.”

He said that “having executed the joint venture agreements, the government then turn around to deal with the claims from the land owners which if we had considered first, it would have helped us to go into the joint venture.”

“We were in a hurry to let go (divestiture) and now we have a burden to pay the claims in order to satisfy the warranty that we had un-incumbent assess, possession and user of the land. The cost of the acquisition of the E.I. is on the government and the cost remains unpaid,” he told Sole-Commissioner Justice Yaw Apau.