Kufuor to cough up $350,000

Secret deal at PMC exposed

... MD Boachie to face sanctions

The Committee of Enquiry, set up by the dissolved Board of Directors of the Precious Minerals Marketing Company (PMMC), has recommended sanctions against the Managing Director (MD), Mr. Peter Boachie, for entering into transactions without the Board’s approval.

According to the report by the Committee, the MD advanced a loan facility of $550,000 to Sian Goldfields Limited (Sian), a company owned by Mr. Ben Kufuor, a cousin of ex-President Kufuor, who is a magnate with major holdings scattered all over the country.

The man, who lives in Takoradi and owns several properties, all in the Western Region, including substantial interests in AT&P and Primewood, never offered any of these as collateral for the loans, but managed to arrange for the Social Security and National and Insurance Trust (SSNIT) to take up significant interests in Primewood.

The report noted that the loan facility to Sian had been executed before the Board was inaugurated, and that the MD, who was then the Director of Finance, was a witness to this agreement, at the time of its execution on December 21, 2000.

However, the MD failed to brief the new Board on this substantial financial commitment, until it was discovered by the Audit and Finance Sub-committee, one year eight months after the expiration of the contract.

“The MD and his management team continued to advance this facility even after the expiration of the agreement, without any notification to, or approval by the board,” the report stressed.

It stated that with the inauguration of the new Board, the MD was duty-bound to properly brief and draw the new Board’s attention to the expired Sian loan facility.

“Management should have obtained approval for all transactions that would be seen to have a financial impact on the company’s operations. The MD’s contention that the contract was a perpetual one, and therefore did not need any intervention by the board is incorrect. Indeed, the agreement had clearly stated that the contract was renewable, and the board had clearly asked management to stop any further payments to Sian, but management made two more advances after that instruction,” the report reiterated.

It stated that the MD acted improperly when he continued to make further advances to Sian after the expiration of the contract.

The Board Chairman, Mr. Stephen Adubofuor, confirmed the report to The Chronicle, adding that they could not implement it because they were currently out of office.

He said Sian had not finished paying the debt, and that the government should make efforts to retrieve the loan, which was state money.

The MD, Peter Boachie, on his part, told this reporter that the deal was juicy because they were going to have a record 10% interest on it. However, somewhere along the line, the mining company was rocked by a serious problem and could not repay the loan.

He indicated that the company was about to pay the total debt, but it encountered a problem, since the company in Canada, Midlands, which had promised them a loan facility was stopped by the Canadian government from transferring the money outside the jurisdiction, due to the economic recession.

“They owe us; they are paying; they are making their best efforts to pay; it is left with about $350, 000,” he added. The committee, which investigated the activities of Buachie, also discovered that an amount of GH¢24,000, as against GH¢10,000, was used to re-wire Diamond House in Accra without any approval from the board.

“The expenditure was above the MD’s spending limit, and he should have sought the board’s approval, given the length of time it took to undertake consultations with the technical subcommittee. The MD should have requested an emergency board approval for this project,” the report stated.

The Committee recommended that the board apply prompt sanctions when such rules or regulations are violated by management, emphasising that the MD’s practice amounted to financial indiscipline.

The Board further discovered that an estate house at Dansoman in Accra was sold by the MD, and payment effected by Agyaba Trading Company, the buyer, before advertisement for the sale of the building appeared in the newspapers. The report continued that the sale was not disclosed to the Board, but was discovered when the Audit and Finance Sub-committee noticed a credit in the financial report, and drew the board’s attention to it

Reacting to the allegations to The Chronicle, Mr. Boachie intimated that the report lacked substance.

Regarding the sale of the Dansoman house, he said, when the Deputy Managing Director for Administration, Mr. Alfred Kotey, was appointed, he rejected the Dansoman official residence, saying that it was below standard, although he (Mr. Boachie) had occupied the building without any qualms.

He said the Chairman of the Board sided with Mr. Kotey, who was his in-law, to sell the renovated building and acquire rental accommodation for Mr. Kotey.

“The building was valued by the AESL at ¢331 million, but we managed to sell it at ¢350 million to one of our gold suppliers. The money was deposited at HFC,” he stressed.

He said in the matter of the rewiring, he used his authorisation as the MD to enable the contractor complete the work, because he was in control, and not the Chairman of the Board.