…OVER DIVESTITURE OF NSAWAM CANNERY – THEY OWED THE STATE OVER 21 BILLION OLD CEDIS AS AT 31 DECEMBER 2005 & STILL COUNTING!

SOURCE: NEW CRUSADING GUIDE

Jerry Rawlings and his June 4 Movement (JFM) raised the red flags against the People’s National Party (PNP) Administration of Dr. Hilla Limann when the latter sought to promote the privatization/divestiture of State-Owned Enterprises (SOEs) including the State’s majority interest in the Ashanti Goldfields (AGC). An international seminar on Ghana’s gold resources with special focus on the AGC organised by the Limann government, was seen as a conspiracy between the Limann Administration and the Bretton Wood institutions to sell the birthright of Ghanaians to foreign interest.

Come the mid-1980s when the leaders of the Provisional National Defence Council (PNDC) had made their ‘U-Turn’, and decided to implement the ‘Limann-type’ policies they had previously castigated and labeled ‘new-colonial’, it became necessary to rationalize the ‘U-Turn’ and provide a justification for their political about-turn.

The then PNDC Secretary for Information, Mr. Kofi Totobi Quakyi, chose the occasion of the 21st anniversary celebration of the Ghana Broadcasting Corporation (GBC) to deny that there was an underhand attempt by government to privatize all state enterprises. In a nation-wide radio and television broadcast, Mr. Totobi-Quakyi said that reviewing state enterprises through a profitability yardstick was not tantamount to a wholesale or omnibus privatization exercise (see Ghanaian Times, August 1, 1986).

While emphasizing that the PNDC will not repeat what he described as “the 1966 sell out by the erstwhile National Liberation Council (NLC) regime”, Mr. Totobi Quakyi said that “IT IS NOT THE INTENTION OF THE LEADERSHIP OF THE COUNTRY TO ALLOW INDIVIDUALS A FIELD DAY TO BUY UP STATE ENTERPRISES AND END UP CREATING UNEARNED WEALTH FOR ANY PARTICULAR GROUP OF PEOPLE, NOR IS IT OUR INTENTION TO DISINVEST JUST FOR THE SAKE OF THROWING WORKERS INTO THE STREETS”.

The PNDC regime and its successor NDC (1&2) administrations had by 2001 when Mr. Rawlings was exiting from office as a constitutionally elected Head of State and President, divested about 304 out of a total of 406 State Assets (including government shares/interests in joint ventures) which were available or had been slated for divestiture.

The effect of this widespread divestiture undertaken by the (P)NDC governments was that hundreds of thousands of Ghanaians were retrenched and/or made redundant with many complaining about not being paid their End of Service Benefits and gratuities. Paradoxically, some individuals, contrary to Mr. Totobi Quakyi’s July 31, 1986 pledge, were allowed a field day to buy up state enterprises and ended up creating unearned wealth for themselves, at the expense of the nation.

Typical examples were what happened in the cases of the divestiture of the State-Owned Star Hotel to the ‘family friends’ of Nana Konadu Agyeman-Rawlings, ‘the Tamans’, and the GIHOC Cannery company to Caridem sponsored by Nana Konadu’s 31 DWM.

Nsawam Cannery which was recently commissioned by former President Rawlings and Nana Konadu, was previously known as GIHOC Cannery Company Ltd, Nsawam Division, a State-Owned Enterprise (SOE) of which Government of Ghana (GoG) was the sole shareholder. It was established in 1965 under the Nkrumah government and became operational in 1968. It specialized in the canning of local fresh fruits and vegetables, and the production of alcoholic and non-alcoholic beverages like Bramsco Schnapps, Aperitif Wine, Napoleon Brandy and Communion Wine. It also produced non-alcoholic beverages such as orange squash, orange syrup, mixed fruit syrup and limejuice cordial. It also had exotic products including canned tropical snails.

The company was officially put up for divestiture in 1994, 13 years after Rawlings and his PNDC cohorts had illegally seized power from Dr. Limann’s People National Party (PNP) Administration. There are many Ghanaians alive today who can testify to the viability of the company, at least in the 1970s and early 1980s, and who can verify that the products of Nsawam Cannery were seen and bought on local market.

Times started going bad for the company from the mid – 1980s to the mid-1990s, the period Mr. Rawlings says the company became “rotten” and a “place nobody wanted”.

Significantly, Mr. Rawlings was in charge of state power at the time the company was gradually collapsing and getting “rotten”. It was his regime/administrations (PNDC, NDC (1&2)) which ironically presided over the ‘rot’ he (Rawlings) was lamenting about during the recent commissioning of the cannery.

To add insult to injury, the divestiture of Nsawam Cannery, according to official audit reports issued by the office of the Auditor-General in 2004 and 2006, was riddled with irregularities, improprieties and even clear-cut fraud leading to the willfully causing of financial loss to the State.

As published in our October 21, 2010 and October 22, 2010 editions, the Auditor-General’s Reports indicate that Caridem “did not keep to the payment terms of the offer, and so as at 31 December 2000 had seemingly paid a total of ¢1,469,069,600 leaving an outstanding balance of ¢1,319,930,400”.

This balance, according to Auditor-General, was without the accrued interest which was calculated as ¢7,941,298,870.97.

The Auditor-General observed that the DIC and Caridem officials had deliberately concealed the interest accrued and had stated that the balance outstanding as at December 31, 2000 was ¢1,320,776,400 instead of the actual and correct figure/amount of ¢7,941,298,870..97.

The Auditor-General also noted that a careful examination of the records made available to him by the DIC, showed that the non-refundable commitment fee of ¢274,984,600 which Caridem claimed that they paid on January 2, 1995 and two subsequent other amounts, ¢10 million and ¢190 million claimed to have been paid on June 23, 1995 and September 26, 1995 respectively could not be found in the books of the DIC.

“I COULD NOT TRACE ANY CHEQUE NUMBERS OR RECEIPT NUMBERS INDICATING THAT THE THREE AMOUNTS WERE PAID. MY CONCLUSION IS THAT THEY WERE NOT PAID. THEREFORE THE AMOUNT OWED BY CARIDEM AS AT 31 DECEMBER, 2000 WAS ¢8,416,283,470.97, BEING ¢7,941,298,870.97 PLUS ¢274,984,600.00 PLUS ¢10,000,000.00 AND ¢190,000,000.00”, emphasized the Auditor-General on page 5 of his “Supplementary Report On Investigation into Financial and Procedural Improprieties in the Divestiture of Nsawam Cannery Limited to Caridem Development Company Limited”, dated January 20, 2006.

As shown by excerpts (Computation Of Interest Payable On Outstanding Balance: February 1995 – December 2005) in the January 20, 2006 Audit Report on the divestiture of Nsawam Cannery published on page 3 of today’s edition of The New Crusading GUIDE, Caridem, the business wing of the December 31 Women’s Movement (DWM), according to official records of the Divestiture Implementation Committee (DIC) owed the State of Ghana a total of ¢21,147,145,136.45 as at December 31, 2005.

Caridem’s debt profile has been increasing by the month since December 31, 2005. We are in November 2010, and we are still counting, all in the name of Probity and Accountability, the gospel according to ‘Saint Rawlings’!

Tomorrow’s edition of The New Crusading GUIDE will feature the Validation of Assets and Valuation Reports on the Cannery’s Assets (Land, Plant & Machinery, Technical Stocks, Motor Vehicles, Trading Stocks, Laboratory Stocks, etc) prior to the assumption of ownership of the Cannery by Caridem on February 18, 1995. Please stay tuned for more….