Skip to main content

20-Year review of judgement debt payments in Ghana — Impact, causes, remedies (III)


 In this section, we highlight selected cases of judgment debts to illustrate the extent to which negligence, blatant disregard for public procurement laws, and illegal abrogation of contracts by public officials in their line of duty leads to judgment debt awards against the State and results in the payment of huge sums from the public coffers.

Table 4 provides a summary of the cases described in the sub-sections below and other selected cases.

Judgment debt payments due to contractual breaches

Rockshell International Ltd vs. Attorney General

How GH¢55,305.60 Contractual obligation became US$35,000,000.00 Judgment Debt Payment.

The Report of the Sole Commissioner for Judgment Debt Enquiry contained the payment of US$35 million, equivalent to GH¢51,047,500 (using 2010 $/GHc rate) to Rockshell International Ltd as negotiated settlement payment for performance under a contract to supply stones to the Keta Sea Defence Project.

The facts as captured in the above report are summarised below.

In December 1983, the Government of Ghana awarded Rockshell International Ltd a contract to supply Stones for the construction of the Keta Sea Defence Project.

Rockshell performed its obligations under the contract and on 28 January 1986, issued a certificate for payment of five hundred and fifty-three million and fifty-six thousand old cedis (¢553,056,000.00), or in Ghana cedis terms, fifty-five thousand, three hundred and five cedis, sixty pesewas (GH¢55,305.60).

After several unsuccessful demand notices and follow-ups, the company instituted legal action against the State and obtained a favorable judgment on 20th November 2006. A total of Seventy million United States Dollars (US$70 million) was awarded by the court in favor of Rockshell International.

The government at the time could not settle its indebtedness to the company.

Change in govt

Following a change in government in January 2009, the new government was faced with mounting cases of outstanding judgment debt payments suffocating the government.

The government decided to re-negotiate with significant judgment creditors, one of which was Rockshell International Ltd.

The negotiations teams were led by Philip Addison, who was Counsel for Rockshell International and on the Government side by the Attorney General at the time, Betty-Mould Iddrisu.

The two parties, on 12th June 2009, agreed on the payment in installments totaling US$35 million as full and final settlement of the liability of the state to the company.

Payments commenced on 22nd June 2009 with US$10.00 million, US$15.00 million was paid in March 2010, US$5.00 million in July 2010, and ended with the final payment of US$5.00 million on 5th August 2010, thus bringing the case between Rockshell International and the Government of Ghana to a close.

Bank of Africa vs. Ghana Post & Messrs Brick House

An unauthorised contract involving a GH¢45,000 loan cost taxpayers GH¢215,168.23

The Auditor-General’s report on public boards, corporations, and other statutory institutions for the period ended 31 December 2019 revealed that Management of Ghana Post Company Ltd awarded a contract to Messrs Brick House (GH) Ltd to renovate the Kaneshie Post office at the cost of GH¢125,022.15 in March 2009.

Aside from the fact that Messrs Brick House lacked the financial capacity to execute the contract as prescribed by the Public Procurement Act of 2003, the following pre-qualification documents were also not provided:

. Tax clearance certificate

. Business registration certificate

. Ministry of Works and Housing Certificate of classification

. Letters of Credit/ Bid Security/Performance Bond and

. SSNIT Clearance

Loan from Amalgamated Bank

Messrs Brick House, jointly with Ghana Post, contracted a GH¢45,000 loan from Amalgamated Bank Ltd (now Bank of Africa) to finance the project. Upon completing the project, Ghana Post failed to pay Messrs Brick House the certificate amount of GH¢95,883.63 for work done.

The bank filed a suit in court against Messrs Brick House and Ghana Post for failure to pay the loan. Judgment was entered against Ghana Post for a sum of GH¢169,168.23, constituting interests accrued on the GH¢45,000 loan.

An additional GH¢46,000.00 was claimed by Messrs Brick House. In this particular case, the Auditor-General recommended that the Board and Managing Director of Ghana Post be held liable for the loss and made to refund GH¢90,146.08 (the difference between the contract sum and the total debt incurred).

Comments

Popular posts from this blog

MTN Ghana & MTN MoMo CEOs win laurels at Ghana CEO Awards

  The Chief Executive Officer of MTN Ghana, Selorm Adadevoh ,   has been adjudged  CEO of the Year  –  Telecom  at the  2 nd  edition of the  Ghana CEO  Vision  and  Awards   held  in Accra. At the same event, the CEO of Mobile Money Limited (MTN MoMo), Shaibu Haruna was also adjudged CEO of the Year – FinTech Service Provider. Selorm  Adadevoh’s award  is in recognition  of  his   achievements   in the areas of   sustainability, leadership excellence, innovation and others  in the telecoms space  which  has contributed to  job creation to support the  growth of Ghana’s economy. Patrick Afari (r), General Manager, Supply Chain Management and General Services receiving CEO of the Year – Telecom Award on behalf of Selorm Adadevoh Receiving the award on behalf of Selorm, Patrick Afari, General Manager, Supply Chain Management and General Services ,  expressed appreciation to the organizers for the award. He  noted that  th e  award will go a long way to inspire MTN to do more for Ghanaian

EB-ACCION DISBURSES US$15 MILLION

By Fred SARPONG Ecobank-Accion (EB-Accion), a partnership between Ecobank Ghana Limited and Accion International has disbursed amount to the tune of $15 million to over 36,000 borrowers in Micro, Small and Medium Enterprises (MSMEs) sector in the country, since the institution was set up barely six months ago. Frances Adu-Mantey, the Managing Director of EB-Accion disclosed this to Business Week in Accra last week during the official opening of Accion Hub headquarters in Africa. The institution’s current portfolio stands at GH¢4 million. She stated that currently, EB-Accion have over 6100 customers who save with them throughout the four branches of the institution. According to her, in order to improve the services of the institution, Ecobank Share Services center will facilitate the technology aspect of the bank by networking all the branches of EB-Accion. Maria Otero, President and Chief Executive Officer of Accion International said that the center’s staff in Accra will provide supp

Amantin & Kasei Community Bank posts impressive growth, with over GH¢1m profit

 Amantin and Kasei Community Bank, at Amantin in the Bono East Region has posted impressive growth in all the performance indicators during 2022 financial year under review. The bank recorded profit after tax of GH¢1,055,662, representing 35.66% more over the 2021 figure of GH¢778.151. This achievement stemmed out of 49.24% gross income growth from GH¢8,143,526 to GH¢12,153,537. Total deposits of the bank went up by 36.20%, changing from GH¢50,959,848 in 2021 to GH¢69,405,591 in 2022. The bank increased loans and advances by 22.15% from GH¢14,128,017 to GH¢17,257,614. Total assets showed an appreciation of 29.32%, amounting to GH¢77,918,288 as against GH¢60,250,693 in the previous year. On the other hand, the bank posted a marginal increase in short term investments portfolio from GH¢24,439,761 to GH¢26,585,698, indicating 8.78% change. The Chairman of Board of Directors, Amantin and Kasei Community Bank, Dr. John Oduro-Boateng, disclosed this during the 18th annual general meeting of