MPIANI SOLD GOV'T CARS
… but Fairllop fails to pay government despite 20% discount offer
Posted: The Chronicle | Wednesday, September 9, 2009.
By Charles Takyi - Boadu & Kleran Canning
Details have started emerging about the ‘strange’ circumstance under which the Government of Ghana (GoG), through the Ghana@50 Secretariat sold back some of the cars used during the celebration of the country’s 50th independence to companies who made the initial purchase for the government.
Documents in the possession of The Chronicle show a clear case of discrimination against some of the companies involved. Out of the numerous companies contracted by Ghana@50 Secretariat, only Fairllop International limited, which was given the opportunity to supply the state with 40 Jaguar X-type vehicles for the celebration, at a unit cost of US$36,600.00 - totalling US$1,464,000.00 was giving the opportunity to buy back the cars at a 20% discount.
Fairllop is owned by Eric Agyemang, nephew of the former Chief of Staff and Minister for Presidential Affairs, Mr. Kwadwo Mpiani, who doubled as the Chairman of the Planning Committee of the Ghana@50 celebrations.
The government sold 35 slightly used cars at US $28,000.00 each to Fairllop, which had purchased the same cars for the Secretariat. The company was asked to make a 20% down payment of the amount involved. Payment for the remaining 80% was to be made by September 30, 2008.
One L.B Tusoe, the Chief Director at the office of the then Chief of Staff and Minister for Presidential Affairs was ordered to take the necessary steps to change the ownership of the cars to Fairllop, at the Driver and Vehicle Licensing Authority (DVLA).
Despite these arrangements, Fairllop did not pay a pesewa for the purchase of the cars. It also did not pay the 20% down payment, yet the ownership of the 35 cars were changed into its (Fairlop) name.
Meanwhile, companies like Svani limited, which supplied 50 units of Mercedes Benz to the event organisers at a price of 66,900.00 Euros per unit, was made to purchase 45 of those cars back, without any discount, as in the case of Fairllop which was given a 20% discount, a clear case of discrimination. Svani limited, however, managed to pay the total of US$3.763.125.00 whilst the debt of Fairllop remains outstanding.
When he appeared before the Commission of Inquiry investigating the Ghana@50 celebrations last week, Chief Executive Officer of Fairllop, Eric Agyemang, explained that when they had the offer to purchase the cars, they wrote to government indicating their intention to use an amount of US$93,684.21 which government owed them to offset the 20% of the down payment.
He claimed the amount was the exchange rate differential for the payment of the cars which remains outstanding. Though he did not receive any response from government as to whether or not it agreed to his proposal to use the said amount owed him to defray the cost, Mr. Agyemang assumed that government had agreed to the proposal.
According to him, the company was expecting the payment of an amount of US$732,000.00 from the Secretariat, as the remainder of the outstanding arrears for the purchase of the 50 cars, but government ended up paying less.
Asked whether he notified the Secretariat about this exchange rate price differential, Mr. Agyemang responded in the negative, since according to him, at that time the Chief Executive, Dr Charles Wereko-Brobby was not available, a situation he himself admitted should not have prevented his company from putting it into writing, since in his absence the Secretariat was still running.
According to the CEO of Fairllop his company proposed to the Transitional team that they are ready and willing to return the cars to government upon reconciling their accounts, subject to government approval.
He however, noted that his company has not received any response from government to that effect, and therefore asked government, if possible, to come for the cars since they were not able to sell them, in order to settle their indebtedness of a whopping US $1,00800.00 to the state.
If deductions are made from the exchange rate differentials, Mr Agyemang said Fairllop owes government US$108,000.00. Taking into consideration the fact that one takes risks in any business venture, Chairman of the Commission, Justice Duoso asked the company to hold onto its risks, and further asked them to take steps to negotiate their liability.
Meanwhile, Kieran Canning reports that the administrator of the district assembly common funds was given a stern examination yesterday into his role in the Ghana@50 souvenir scandal.
Administrator of common fund
On a day when the Ghana@50 Secretariat’s lavish expenditure on luxury cars was again highlighted, it was Mr. Joshua Magnus Nicol, the common funds administrator, who received the harshest criticism from the commission panel.
Mr. Nicol announced that the staggering sum of GH¢5,160,000 had been spent o the production and transportation of plastic cups. He defended this inordinate figure by saying that a cup had been made for every school child registered in Ghana, with the intention that the cups would be kept as a commemorative souvenir of this critical date in Ghana’s history.
Mr. Nicol said that deductions had been made for the cost of the cups from the common fund given to every district assembly in the country. However, he admitted that he had neither gained consent from District Coordinators nor checked that all the assemblies had received the cups before deducting the cost from their fund.
Mrs. Marietta Brew Appiah-Opong led the condemnation of Mr. Nicol’s role in the debacle. She pointed out that many assemblies that have been called before the commission did not receive the correct number of cups or in extreme cases had received no cups at all.
Moreover, she said the unit price of 0.97GHp had not been communicated to the assemblies and that in many cases the cups had not even been distributed through the Ghana Education Service to the school children, but had been used at public functions instead.
Mrs. Appiah-Opong then questioned Mr. Nicol as to how he thought such a huge expense on plastic cups could be in the interest of the social & economic development of Ghana. A defiant Mr. Nicol claimed that the cups were useful in the social development of the school children as they were a symbol of a landmark time in Ghana’s history that they had lived through.
A clearly irked Mrs. Appiah-Oppong denounced Mr. Nicol’s reasoning as she responded:
“I do not agree with you that spending GH¢5,160,000 on cups, which districts tell us did not even reach the children, institutes development.”
Justice Isaac Duose also criticized Mr. Nicol for his complacency in refusing to ensure that all cups had been delivered to the assemblies. Mr. Osei Tutu Prempeh laid one final blow by slamming Mr. Nicol for allowing some GH¢1,600,000 to be spent on the transportation of the cups without looking for more affordable alternatives.
Mechanical Lloyd
The spotlight was also put on the Ghana@50 Secretariat for the expenses they incurred in buying luxury cars for the celebrations in 2007.
In a well composed presentation before the commission, Mr. Terence Ronald Darko, Managing Director of Mechanical Lloyd, said that the Secretariat entered into an agreement with his company to buy fifty BMW saloon cars for ?53,293(GH¢114,353) each, a total cost of ?2,664,650 (GH¢5,720,173).
Mr. Darko stated that 50% of the payment due was received by Mechanical Lloyd in February 2007. However, with the remaining 50% due to the company February 2008, the secretariat agreed a deal with Mechanical Lloyd to sell back twenty-five of the cars. In a complex deal the company surprisingly agreed to buy back the cars at the same price they had sold them for a year earlier.
Mr. Darko explained that this decision was taken only because the Secretariat, with the backing of the government, agreed that Mechanical Lloyd would pay no import duty or VAT on the vehicles.
Of the remaining twenty-five cars, ten have remained in the possession of the presidential office whilst Mechanical Lloyd was commissioned to sell the other fifteen. Mr. Darko confirmed that eleven of the fifteen cars have been sold at the unit price of ?45,000.
Mr. Darko then confirmed to the relief of the commission that no debts remain outstanding from either party, joking that the only thing his company owes the government is tax.
In two more shoddy submissions before the commission, representatives of Interplast Ltd and Bx4 Company Ltd. appeared confused at to how much money is still owed to them by the Ghana@50 Secretariat.
Mr. Sivnesh Kumar, District Manager of Interplast Ltd, claimed in his submission that the Secretariat still owed his company the sum of $49,687USD for windows supplied for a housing project in 2007.
However, upon inspection of the company’s records by the panel Mr. Kumar made an embarrassing u-turn, accepting that the debt owed flowed from a separate contract with the AUDCL project, who admitted last week before the commission that they still have debts outstanding to pay.
Mr. Steve Adika, Projects Director for Bx4 Co. Ltd, also made a major gaffe when he accepted that the Secretariat had never signed the contract he had been working from for the past three years.
In his submission before the panel, Mr. Adika claimed that his company was owed the sum of GH¢104,376. This sum comprised of an outstanding payment for work done of GH¢72,700 plus interest incurred on a bank loan and an interest rate outlined in terms of the unsigned contract.
The panel made it clear to Mr. Adika that the terms of the contract which he had referred to could not be relied upon as he had no evidence that the Secretariat had ever signed the contract.
Mr. Adika accepted his grave error but outlined his intention to recover the GH¢72,700 debt due him for work done.