A High Court in Accra has ruled that the Government should take over the assets of Quality Grain Company (Ghana) Limited because it has failed to re-pay a bank loan guaranteed by the Government.

The court, presided over by Justice Yaw Appau, said it was convinced by submissions in support of an application by the Attorney General (AG) and Minister of Justice, Nana Akufo-Addo and has no reason to refuse it. Justice Appau said even though the notice to the company was short, having been served on May 11, it did not make any attempt to reply.

In an affidavit supporting the application, Nana Akufo-Addo said on November 13, 1996, Quality Grain obtained 6,196,330 dollars from South Trust Bank of Alabama, US for the purchase of agricultural equipment. The loan plus any interest accruing thereon, were guaranteed with a promissory note dated November 13, 1996, and issued by the Ministry of Finance representing the Government.

He said in order to ensure that in event of default the Government would be able to recover the loan, a Deed of Indemnity and Floating Charge for the guarantor to take over the assets of the Company was included in the agreement.

Nana Akufo-Addo said March 15, 1997 was the date for repayment of the first installment but the company has persistently defaulted. He said the loan agreement stated that on March 15 and September 15, every year from 1997, the Finance Ministry was to issue demand notices for payment of defaulted amounts plus default interest at 12 per cent per annum.

The Minister said in fulfillment of the loan agreement, the government has repaid 8,152,462.31 dollars while the company has made no effort to indemnify its guarantor to the deed of indemnity.

The government of President Kufuor has criticized officials of the former government for its involvement in the operations of the Quality Grain Company. The government says an amount of $21 million was pumped into the company by the previous government leading to the prosecution of some former government officials including the former Finance Minister, Kwame Peprah.

Ghana's greatest opposition party, the NDC has filed a writ restraining the Attorney General from going ahead with the prosecution of the former government officials being charged for causing financial loss to the nation.

The party has indicated that it stands behind those government wants to prosecute in connection with the matter saying their prosecution is an attempt to criminalize administrative discretion.

The NDC maintains that the Aveyime Rice Project is a viable one which the present government would want to take credit for hence its intention of criminalizing every act of the former government in connection with the company.

A leading member of the party and a former Minister accused the NPP government of also putting an amount of 25 million cedis into the payment of staff of the company whilst another 600 million was been processed a press conference addressed by the Attorney General to announce government's intentions.