Former Finance Minister, Kwame Peprah will soon be fighting another legal battle. He is reported to have instructed the Ghana Commercial Bank (GCB) and National Investment Bank (NIB) to advance a loan of ?13 million and about $2.7 million respectively to Coco Palm Limited and La Palm Beach Hotel respectively. The Bank of Ghana was also said to have been instructed by the former Minister to guarantee the loans.
There were anomalies in the processing of the loans. GCB granted the ?13 million, which constituted 47.6% of its net worth of ?87.1 million as at December 1995. The loans were granted in 1996/7.
''With regard to the NIB, the processing of the loan did not follow the normal procedures of the bank. For instance, there was no formal letter of application for the loans, appraisal report, Executive Committee approval (except Board approval extract), among other requirements.''
The twin companies defaulted in the payment the loans and upon persistent demands by the Banks, the former Finance Minister authorized the Bank of Ghana through the Controller and Accountant General’s Department to pay about ?2.59 million and ?1.3 million to the NIB and GCB respectively.
A source at the Finance Ministry hinted that the Ministry had paid a total of about ?24million on behalf of the two companies to the Bank of Scotland, GCB and NIB.
It was established that Coco Palm did not put up any hotel. Rather it built chalets and sold them out to the public. It transferred the proceeds to its parent company – International Generics Company Limited, United Kingdom. Mr Peprah and other government officials are currently standing trial over their alleged involvement in the Quality Grain scandal.
