Business News of 2013-12-02

Minister in trouble over GCNET contract

There is an uneasy calm at the Ministry of Trade and Industry over a new five year contract that the Ministry is alleged to have signed with Ghana Community Network Services Limited (GCNET) at a time the company is in court over alleged malpractices and manipulation of the GCNET system resulting in huge losses in Government Revenue.
GCNET provides data for customs and has been responsible for the platform for the exchange of custom data since the modernization of the destination inspection scheme was adopted in 1997. GCNET holds the totality of customs processed data, national trade statistics and indirect tax revenues, as well as traders and shipping lines.
But the company has in recent years been dogged with a lot of challenges amidst allegations of manipulation of the system to help importers avoid paying the appropriate taxes or escape paying their requisite duties altogether. It is instructive to note that since GCNET started operating the system, it has never been audited.
In September 2010, the GCNET/GCMS suffered some severe breaches and an employee of the GCNET who was suspected to have been responsible for the breaches, deleted large volumes of data from the system, resigned from the company and fled the country.
The company is currently in court, fighting a Citizen Vigilante’s court plea to have the entire GCNET/GCMS audited to ascertain the extent of the alleged crime and the level of the revenue losses.
But while GCNET is in Court contesting the locus of the Citizen Vigilante and also the plea for an audit of their system, a Minister of State is alleged to have signed a new five year contract with GCNET on the blind side of the court.
GCNET’s original contract was to expire in December of 2012 and in view of the Court case, it was agreed by all parties in court that the contract be extended for only one year ending December 2013 to enable work to go on even as the court looked into the matter.
But somehow, before the one year extension could run out, GCNET is said to have received a new five year contract deal.
What is intriguing, according to our source, is that, both the Minister of Trade, Haruna Idrissu and the Attorney-General and Minister of Justice, Mrs. Marietta Brew Appiah-Oppong are oblivious of the award of the new contract.
Tongues are wagging at the Trade Ministry as to who gave the order for the contract extension especially when the GCNET contract was due to expire this month. “There is a case pending at the Appeals Court involving this Ministry and a private citizen, and now that the contract has been extended for GCNET on the blind side of the Court, we fear our Minister may be cited for contempt by the Court”, a source at the Ministry lamented to the Scandal last week.
According to the source, after GCNET was sued, it challenged the locus of the plaintiff to make those claims, but the High Court threw out their opposition and sustained the locus of the Plaintiff as rightful. After the opposition of GCNET was thrown out, it filed an appeal at the Appeals Court challenging the earlier ruling.
Giving a trajectory of events leading to the Court case, which has travelled from the High Court to the Appeals Court, the source explained that, in April this year-2013, a Citizen Vigilante, by name JOE ONYAME aka. KOKU EKPE filed a writ at the Superior Court of Judicature in the High Court of Justice- the Commercial Division, against Ghana Community Network Services Limited (GCNET), the Ghana Revenue Authority (GRA) and the Ministry of Trade and Industry.
In that writ, the Citizen Vigilante was seeking the court’s order for a comprehensive audit of the Ghana Customs Managements System (GCMS)- a system put in place and managed by GCNET. In his affidavit, Mr. Onyame said among other things that “as someone who is involved in the customs clearing business, I had information leading me to suspect that some nefarious activities were going on with the tacit connivance of officials of GCNET and the GRA”.
The Citizen Vigilante also said that “While 1st Defendant/Respondent (GCNET) has demonstrated the workability and effectiveness of the system to the satisfaction of the Government of Ghana in order to be engaged to undertake such a crucial national exercise which is the lifeblood of the national economy, a report has shown that the human element component has in the course of the operation of the system, been compromised since the very officials who have knowledge of the workings of the system have used their position to manipulate the system to their advantage”.
In June this year -2013, the Court, presided over by Her Lordship Justice Getrude Torkonor, ruled in favour of the Citizen Vigilante and ordered GCNET to open their defence. Unfortunately, the Attorney General’s Department that represented GRA and the Ministry of Trade in the matter did not show any support for the ruling either, and has adopted a rather nonchalant and passive attitude as GCNET continues to kick against the Audit of the System.
Even though it is GCNET that put the System in place and manages it, the System really belongs to Ghana. It is this system that holds the totality of customs processed data, national trade statistics and indirect tax revenues, as well as traders and shipping lines. It is the nerve centre of all trading activities that take place at the Port, but has never been audited. Why should the audit of a System that determines how much the State gets by way of revenue be left to a Citizen Vigilante to fight for while State Officials who should be protecting Ghana’s interest look on and are rather and seemingly supportive of the private company that is kicking against the audit?