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Saturday, October 10, 2009

Manager Admits Fraud, Bribery of Former IGP and Politicians

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...Confessions At PSC Tema Shipyard

By Livingstone Pay Charlie The Chief Financial Officer of PSC Tema Shipyard Ltd has admitted diverting the company’s funds into a front company which was used to pay monies to powerful public officials, including the former IGP and leading politicians.

It may be recalled that in July this year, the Committee for Joint Action (CJA) revealed that the Malaysian majority shareholders in PSC Tema Shipyard have cheated the country through various acts of malfeasance which included non-payment of shares to the Ghana Government, non-compliance with procurement rules, strange payments to Board members, irregular payments to solicitors, misapplication of cash, irregular purchases, non-payment of employees’ provident fund into the bank, financial fraud, unaccounted-for payments, overpayments, undated foreign transactions, non-compliance with financial control rules, etc.

PSC Tema Shipyards Ltd was formerly a state-owned company which the NDC government sold 60% shares to a Malaysian Company, Penang Shipbuilding and Construction Industries.

Since then the Ghana Government has received no dividends for its 40% in the company, because government has allowed the Malaysians to have a free reign of the company.

Following the CJA revelations, the parent Company of the Malaysians sent in external auditors, KPMG Malaysia, to investigate the matters raised in the internal audit report.

In a sworn statement to the external auditors, Mr. Mohammed Ismail, Chief Financial Officer, not only admitted almost all the findings of the internal audit report, but went ahead to disclose even more startling information to “justify” their activities. On the charge that they agreed a contract to pay unjustified amounts to a company, called SBT Resource Associates hundreds of thousands of US Dollars for work that could not be justified, Mr. Ismail stated: “Let me provide a background to this. I was introduced to B Xxxxxx (full name withheld byThe Insight), the owner of SBT, by Abdul Rashid who got to know him through his circle of friends in the NDC party. B Xxxxxx told us that the previous government had wanted to take full control of the PSC Tema Shipyard and this was prepared in a document to be tabled in Parliament. BT mentioned that that he can assist in helping to withdraw or block the document from being tabled in Parliament but this would cost some money for PSCT. Payment would have to be made to his company, SBT as an intermediary, in order for him to pay certain individuals for this purpose. This would cost around USD100, 000.” “BT took me to meet PX Xxxxx (full name withheld by Insight),a political figure at the International Trade Centre. B Xxxxxx came into the picture and assisted us during this period but due to the shortage of funds, the Agreement and payments to SBT was (sic) delayed to January 2009”. “With the above in mind, I entered PSCT into a contract with SBT. However, due to the sensitivity of the deal, the contract has been written in such a way as though SBT were required to facilitate the JV with Ghana Ports to operate the Takoradi shipyard. The contract was to ‘regularize’ payments to SBT. The payments to SBT have nothing to do with the services stated in the contract”. In other words, the contract was only a ruse to get moneys to pay off politicians. The monies referred to above are made up of the following: • US$150,000.00 fee to SPBT to “facilitate PSC Tema Shipyard’s expression of interest as an operator of Takoradi Port Shipyard”; • US$10,000.00 fee to SPBT “to review and identify outstanding obligations of Joint Venture Agreement between PSCT and the Government of Ghana”; • US$25,000.00 fee to SPBT “to recommend organizational re-branding strategies” • US$100,000.00 fee to SPBT to “SUBMIT RECORDS (caps ours) to Government of Ghana for free zone status for PSCT”. In actual fact, none of the above functions was performed by SBT. In the words of the Chief Financial Officer, “The only work performed by SBT Associates was in obtaining the submission documents from Ghana Ports for GH¢150, which I already have”. According to the April 2009 internal audit report, 3 companies were awarded huge contracts without the involvement of the Executive Committee of the Company. Merchant Naval Ratings Associate Co. Ltd was contracted to maintain the cleanliness of the Shipyard’s buildings and provide landscaping at a fee GH¢3,250.00 per month has no janitorial or landscaping capabilities or expertise. JIOE Engineering Complex, a company (part owned by the business partner of the Chief Financial Officer) was paid GH¢23,000.00 at the end of February without evidence of any work done. Keta Shipping Service (a company owned by the Chief Financial Officer and his friend) was given a vague job description to act as an employment agency for PSC for which they were paid whopping GH¢53,500.00 for engaging only 17 security personnel between 15th December 2008 to 3rd March 2009, and without any documentation any other services. In his response to the External Auditors, the Chief Financial Officer stated: “All 3 contracts, namely with Merchant Naval, JIEO and Keta, were directly awarded. Normal practices of obtaining 3 quotations and evaluation of tender were not carried out due to the urgency and confidentiality. Confidentiality, as I did not want the other staffs to know, apart from Abdul Rashid and Wan Roslan, as it(s) disclosure may disrupt our plans to ensure a smooth running of our operations during the interdiction period. “When I met with the 3 contractors, I arrived at the computations using my calculator and I told them that the amount I am willing to offer for their services. I don't have a record of the computations. “I did not consider about the Company's procurement policy during that time of emergency. It is for this reason, that we did not involve Sayibu, the Head of Procurement in this process of awarding the 3 contracts to the above companies. I felt that we need to avoid the leaking of information by limiting the number of people involved. Thus, Sayibu was not informed on the engagement of these contractors.” “As all PSCT's unionized security personnel manning the shipyard were also going to be interdicted, James mentioned that he can obtain manpower with strong security background but again, he requires it to be "parked" under Keta since he does not have a company. The payments would be made to Keta which will subsequently pay him for the services rendered.” For the contract awarded to Keta for providing security in the shipyard, it is a lump sum amount of GHC15, 000 as demanded by James. Regarding “personal expenses” made to police officers during the lock-out of workers in December 2008, the Chief Financial admitted doing so. More important, he went further to disclose that he had money sent to the former IGP, (Mr. Patrick Kwarteng Acheampong) to encourage him to facilitate the sending of the police to lock out the workers. He stated: “It was during this period that Abdul Rashid introduced me to James Bikpe ("James"), who is a police officer, who mentioned that he will be able to assist us in securing assistance from the police after being informed by Abdul Rashid that PSCT had failed in its attempt to do so. However, James needed some money to "facilitate" the process. “Due to its sensitivity, the payment would be made through my company, Keta Shipping Services Ghana Ltd ("Keta"), as an intermediary for James to facilitate this process. I suggested to James to use other companies but he was reluctant to use other companies as intermediary as he wanted to ensure that the payment is secured. Secondly he is a close friend of Abdul Rashid. “I confirm that I am the co-director and shareholder of Keta with Lawrence Duho. Keta was incorporated in August 2008 with my home address registered as the business address and I am also the company secretary of the company.

“Therefore on 9 December 2009, the initial payment of GHc16,000 was paid by PSCT to Keta in order for James to secure the police's assistance by making the so- called protocol payments, but the nature of the service in the invoice submitted by Keta to PSCT was HR services. I prepared the invoice. But, after netting off the tax, the amount paid is approximately GH¢l3,600. GH¢l0,000 is for the IGP and the balance was shared among James, a Chief Inspector and the runner.” “Subsequently, I was informed that the IGP had called Mr. Adeloya, the Tema Regional Commander and instructed him to assist in providing security at PSCT during the interdiction period. “I am aware that there were payments made to the local police which we call “protocol payments”. Protocol payments are a norm in this country.... I did not expect it to be written in the internal audit report.

“Names of the police officers who received protocol payments were not given to ECQ (Internal Auditor) during the internal audit. I am of the opinion that names should not be disclosed as this is a very sensitive matter. However, the list of police officers receiving the protocol payments can be found in my computer. “I do not know why there are receipts for purchase of hampers (to policemen) attached to the GH¢9,000 payment voucher. KPMG need to seek Asare’s explanation for that”. In spite of denials from the Regional Police Command that they received personal expenses, the Chief Financial Officer confessed: “For PV 1683, the GH¢3,000 was the payment to the regional commander and his deputy. This protocol payment has to be made as they are threatening to pull out the police force. The regional commander and his deputy did not get a cut from the initial payment to the IGP which was made through Keta.

Regarding why he established the Keta Shipping Service, which he set up with his friend, Lawrence Duho, the Chief Financial Officer stated:

“The former Minister of Port & Harbour is a good friend of mine. He had sometimes asks me for money or donations especially prior to the elections. With that in mind, Keta was formed.

“Keta was incorporated to salvage the scrap from sinking ships especially in the Volta region. With that in mind, some of the profits from this business can be channelled to the former minister. I do not have the technical expertise and knowledge in this area; therefore I partnered Lawrence to form Keta together”. It is now clear that Ghana is being swindled. The government must act to remove any suspicion that PSCT’s claims about their “relationships” with a leading NDC member is not the reason why the government is reluctant to act on this sordid affair.

The Insight

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