In what looks like a typical "419 scam", a Ghanaian businessman is fighting desperately to save his $1 million investment in a joint venture company he established with some Danish investors.

Mr. Yakubu Adam Kasule, who used the resources of his flagship company, Gbewaa Civil Engineers Limited, to form the Ghana Emulsion Company Limited with The Industrial Fund for Dev. Countries (IFU), and A/S Phonix Contractors, now feel cheated after the Danish partners contracted a loan in the name of the joint venture without his consent.

Volumes of documents currently in the possession of The Heritage reveal that, after the joint venture (Ghana Emulsion Co. Ltd) failed to repay the loan on schedule, the creditor bank has filed a suit in a Ghanaian court to take over the assets of the company, which include Mr. Kasule's $900,000 investment, representing about 31.4 percent of the company's shares.

Currently, the company is under receivership, and Mr. Adam Kasule is fighting to avoid it being liquidated. He is also looking forward to government intervention to save the company, which has the capacity to produce emulsion to meet the country's requirements in road surface dressing/rescaling, tack coat, crack fillers, pothole patching and dust binding.

Ghana Emulsion Co. Ltd was conceived by Mr. Adam Kasule in 1994 for the purpose of producing bitumen emulsion to be used mainly for road construction, rehabilitation and maintenance.

The Ghanaian businessman then contacted a group of Nordic investors who agreed to set up a company with Ghanaian and Danish interests with the following share structure: The Industrial Fund for Development Countries (IFC) of Denmark, 26.1 percent; A/S Phonix Contractors of Denmark, 26.3 percent; Ghana Ventures Capital Fund, 16.2 percent; Gbewa Civil Engineers Ltd 31.4 percent, making a total of 100 percent valued at $2,677,000 million.

Except Mr. Kasule who contributed in kind by providing land, construction of buildings and civil works, the other shareholders contributed cash.

Ghana Emulsion Company Ltd was thus incorporated on April 25, 1995 and was certified to commence business on April 28, 1995.

The Heritage gathered that, as part of financing the project, it was agreed by the Board of Directors (without Mr. Kasule even though he is a member), that A/S Phonix Contractors should negotiate with any potential banking institution for a loan of 10.3 million Danish Kroner ($1.5 million) with an interest rate of 7.03 percent.

The Heritage learnt that A/S Phonix contractors succeeded in arranging for the loan from Den Danske Bank in Denmark, which was to be repaid over six years without any grace period.

The Heritage investigations revealed that the entire loan was provided on the condition of a mortgage arrangement with Den Danske Bank with the understanding that it covered the land, buildings, plant and equipment of the company.

That was the genesis of Mr. Adam Kasule's nightmare since he suddenly realized that he has been crowded out by the foreign partners, particularly so when they imposed one Jenkins Baker, a Dane, on the company as a General Manager and who signed and sealed the mortgage on behalf of the ompany.

Cracks suddenly started emerging among the shareholders. As a result of a disagreement between the local promoter and shareholder, Mr. Kasule, and his partners, the Danish investors said they were finding it difficult to continue their partnership arrangement with Mr. Kasule, which, they cited, was regulated by a Joint Venture Agreement singed between the parties concerned.

Consequently, the foreign partners tried to review the share structure of the company in an effort to resolve the impasse.

The company's lawyers came up with two proposals on how to solve the impass?, namely; (i) Either the foreign shareholders or a new investor buys out Mr. Kasule's shares and reconstruct the company or (ii) the company is totally liquidated.

In this connection, two possibilities existed: (a) a private liquidation, which can only happen by a decision of 75 percent of the shareholding.

(b) A judicial liquidation to be initiated by the companies creditors.

However, the foreign partners realized that a private liquidation could not be possible because Mr. Kasule owns 31 percent shares, therefore the 75 percent shareholding condition could not be fulfilled.

The Heritage gathered that Mr. Kasule flatly refused to sell his shares even though there was an option for him to do so.

Sources close to him explained to The Heritage that it would amount to a sell out of his company if he forfeited his interest in a company that he had struggled to actualize.

Since the private liquidation did not work out, the company's lawyer recommended a judicial liquidation by the company's creditors, namely Den Danske Bank.

Stay tuned for further developments.