Three former top management personnel of the State Insurance Company (SIC) are to be prosecuted for causing financial loss totaling ?67 billion to the company.

A draft forensic report on the operations of SIC blamed the loss on “Excessive recklessness in underwriting of credit guarantee bonds.”

“The report mentioned Messrs. L.K. Mobila, E. Allotey and B. Oduro as the officials who connived with some unidentified firms to milk the company of the huge sum.”

Also cited in the report is former Board Chairman, Roland Atta-Kesson, who is accused of using his former position to benefit from a accredit guarantee of ?257 million which he has failed to pay.

“Former board chairman used his influence to benefit from a credit guarantee and has defaulted in payment.”

The auditors said procurement of ‘Arrive Arrive’ playing cards at inflated price and without board approval also led to ?4.5 billion loss to the company. Six officers are cited for the loss with recommendation that KTBA Ltd., the suppliers be paid the original cost, ?10,000 per playing card instead of the ?30, 000 paid for each playing card.

Apart from the prosecution of the three top officials, the audit team also tasked the new management of SIC to institute legal action against the personalities involved to recover the outstanding amounts.

In his comments on the report, the managing director of the SIC, Peter Oseiduah said the initial report of the audit team submitted to the SIC board was a bit wishy-washy. “Some of the allegations were a bit without foundation. The board sent the report back to the ministry of finance with a number of queries. As far as we are concerned, the necessary corrections have not been communicated to the board,” he told the paper.

The new management which assumed office last February has exposed another shady business deal that has caused the company ?49.3 billion.

In a report on the state of the company submitted to the government last year, the new management said it has put on hold the underwriting of business which has saddled the company with debts running into billions of cedis. The report said the new management is compelled to continue to honour its obligations under the credit guarantee bonds, which were contracted under “reckless” circumstances as stated by the forensic report.

Since May last year, a total claim of ?8,095,612,462 has been paid on behalf of defrauding clients.

The report said whilst SIC was compelled to honour obligations imposed on it by the former management, the company is unable to make recoveries from its reinsurance contracted by the management.

“Our former board, in the last quarter of 2000, commissioned Messrs PriceWaterHouse Coopers (PWC) to audit the guarantee policies granted by SIC from January 31st 2000.

The auditors submitted an interim report on 36 policies they cited. The interim report has since been discussed with the current management and we are awaiting the final audit report.”

According to the report, most cases of abuses were recorded during the previous administration. “Out of the said 36 cases, 31 were written between the years 1998 and 2000, predominantly the period of the last administration which commenced on October 1998.

Our total exposure in respect of these businesses has been estimated at ?49.3 billion.

The report also touched on some of the measures taken by the new administration to address the issue. “Since assuming office in February 2001, the current management have put on hold the underwriting business. Legal actions have been instituted against some of the identified defaulters. We have been able to obtain judgement in some of the cases and the properties involved are being sold accordingly.”

In his reaction to the report of the new management board of the company, the Managing Director, Mr. Oseiduah told the Public Agenda that the intention of his administration is to lay bare the facts as they were and to brief government on procedures to recoup the huge losses.

“We have had little bit of success now. I think that we will succeed. We are on top of the problem, he said.