Saglemi Housing case: Government never had $200m to start project – Defence lawyers

Lawyers of former Minister for Water Resources, Works and Housing, Alhaji Collins Dauda have said claims that their client misappropriated and misapplied some $200 million Saglemi Affordable Housing project cannot be true.

According to the defence lawyers led by Thaddeus Sory, out of the $200million Credit Facility that government sourced, it is $198,450,000.00 that was paid into the Escrow Management Account at the Bank of Ghana and not $200 million.

While subjecting Rev Stephen Yaw Osei, the Chief Director of the Ministry of Water Resources, Works and Housing who is the first prosecution witness, to further scrutiny Counsel put to him that “Government never had 200million dollars to start with the project,” as per the Witness’ own Witness Statement.

It was also the case of Counsel to the Witness that, in paragraph 31 of his Witness Statement, out of the 200million dollar Credit Facility that government sourced, it is $198,450,000.00 that was paid into the Escrow Management Account (EMA) at the Bank of Ghana.

The witness, responded in the affirmative but explained that “The 200milloin Credit Facility less bank charges so the final funds that was released into EMA was $198,450,000.00.”

Alhaji Collins Dauda, together with Dr. Kwaku Agyemang-Mensah, a former Minister for Water Resources, Works and Housing; Alhaji Ziblim Yakubu, Chief Director at the Ministry for Water Resources, Works and Housing, are said to have contributed to the Saglemi Housing deal when it was prepared and signed.

Also playing part are businessman Andrew Clocanas, Executive Chairman of Construtora OAS Ghana Limited (now deceased) and Nouvi Tetteh Angelo, Chief Executive Officer and owner of Ridge Management Solutions Ghana Limited.

Alhaji Collins Dauda, the NDC MP for Asutifi South in the Ahafo Region, and the four are involved in the $200 million Saglemi Housing Project scandal.

They have pleaded not guilty to 70 counts including wilfully causing financial loss to the state, misapplying public property, issuing false certificates and dishonestly causing loss to public property.

Under further cross-examination from lead Counsel for Alhaji Collins Dauda who is the first accused person, Thaddeus Sory put to the Witness that, from his own testimony to the Court, “Government never had 200million dollars to start with the project.”

The Witness in his answer said “My Lord, I don’t agree with what Counsel is saying.”

He explained that, “the record shows that a Credit Facility was contracted from Credit Suisse International for 200million dollars less charges so this money is a loan that was made available to Government for the construction of 5000 affordable housing units.”

“The money Government contracted under the Credit Facility which is 200million dollars was it equal to the amount that Government received in its account at the Bank of Ghana?

“My Lord the money was 200million dollars less charges that amounted to $198,450,000.00 less charges,” he told the Court.

Asked by Mr Sory to tell the Court how much less in charges was taken from the whole of the 200million dollars, the Witness sought leave to use his calculator.

“My Lord may I use my calculator? (Leave granted). The charges was $1,550,000.00

So it is clear from your answer that you just gave to this court that the amount of money available to Government to spend on the project right from its inception was not 200million dollars.

“My Lord the amount was 200million dollars and I want to state that just like individuals and corporate bodies contract loans from banks there is always commitment fees and other charges which are taken. So the charges were part of the original amount of 200million dollars,” he explained.

The Witness when it was put to him by Mr. Sory from his testimony to the Court, the 1st Accused (Collins Dauda) is not responsible for the misappropriation or misapplication of any 200million dollars which was sourced for the housing project at Saglemi, the Witness disagreed.

“My Lord per my Witness Statement and available evidences that I have presented to court I have already stated that the 1st Accused person had no business altering the initial Contract.

“Anything that followed his actions and inactions on the alleged misapplication and misappropriation of funds are being given to the court to judge,” the Witness stated

Below is further cross examination of (Rev Stephen Yaw Osei) by Lawyer Thaddeus Sory on November 24, 2023

Q: I am referring you to paragraph 7 of your Witness Statement. In that paragraph you testify that the Minister also petitioned the Criminal Investigations Department (C.I.D.) of the Ghana Police Service to investigate the alleged misapplication and misappropriation of the funds on the 8th of June 2020 you still stand by that?

A: Yes my Lord.

Q: Now from paragraphs 97 of your Witness Statement it is clear that the Minister petitioned the C.I.D. within two months of commissioning the Ghana Institute of Surveyors (GhIS) to audit the Saglemi project is that correct?

A: Yes my Lord.

Q: Now what timeframe did the Minister request the GhIS to present this

Report?

A: My Lord it was for 4 weeks.

Q:So the Minister did not even wait to receive the Report of the GhIS before he petitioned the C.I.D. to also investigate the same project is that correct?

A:The C.I.D. investigation does not influence what the GhIS was doing. They are two different assignments.

Q. That is correct but I am putting it to you that he did not wait for the Report from the GhIS before petitioning the C.I.D.

A. My Lord I said yes. They were performing two different assignments.

Q. From paragraph 101 of your Witness Statement you confirmed to the Court that the value of the project as per the GhIS Report is fixed at 64,982,900.77 USD is that correct?

A. My Lord Isaid the cost of the project not the value of the project.

Q. So will the value of the project differ from the cost of the project as testified by you in paragraph 101 of your Witness Statement?

A. Yes my Lord.

Q. So what would be the value of the project as distinguished from the cost of the project?

A. My Lord from the Report I stated the cost of the project.

Q. And so I agree with you that you stated the cost but I am asking you what is the value of the project since you say they are different?

A. My Lord Iam saying that Istated the cost not the value.

Q. And I agree with you that you stated the cost and not the value. So I am asking you what is the value of the project?

A. My Lord I am saying that from the report the cost of the project is what I have stated.

Q. So in other words you do not know the value of the project Reverend?

A. My Lord the cost of the project is stated there.

Q. Can you explain to the court what you mean when you say that is the cost of the project?

A: My Lord the cost is the aggregate of whatever work that was done. Q: Who does the project belong to?

A: It belongs to the Republic of Ghana.

Q: And so from your testimony the cost being the aggregate of whatever work has been done goes to the benefit of the Republic of Ghana is that so?

A: My Lord provided it is beneficial to the people of Ghana.

Q: I am putting it to you that from Exhibit 1D1 the value of that project exceeds 64million dollars as per paragraph 101 of your Witness Statement.

A: My Lord may I know the relevant portions he is quoting from because I can’t see ti from here. He was asking about the value but I am still maintaining the cost.

Q: Now Exhibit 1D1 that I just showed you disagreed with the Audit Report of the GhIS from where you picked your 64,982,900.77USD which you stated in paragraph 101 of your Witness Statement is that correct?

A: My Lord Idisagree with him.

Q: So your testimony in this court this morning is that Exhibit 1D1 in terms of its findings agrees with the Report of the GhIS which is the subject of your testimony in paragraph 101?

A: My Lord it is at variance with the ASL Report. The GhIS Report is not the same as the Report from the A S L . The GhIS Report confirmed the housing units at 5000 housing units for 200million dollars. The AESL Report stated that the housing units were 1502 from the First Restated and Amended Agreement. I want to put on record that the Honourable Minister who amended and restated the First Amended and Restated Agreement had no locus to change or alter the first agreement without recourse to Parliament. Therefore my Lord in law the First Restated and Amended Agreement and the second one and the subsequent Amended Agreement were al null and void and of no consequence in law. I rest my case my Lord.

BY COURT – Counsel for A5 please proceed.

COUNSEL FOR A5 – My Lord I have a family emergency so one of my colleagues will hold the fort for me.

BY COURT- You are released and we wish you well.

Q. Now I am referring you to paragraph 32 of your Witness Statement. In that paragraph of your Witness Statement you testified that as per Exhibit H 40% of the Contract Price was payable to the Contractor as advance payment is that correct?

A. Yes my Lord.

Q. This payment was a requirement of the Contract (Exhibit H) itself is that correct?

A. There is no provision in it concerning the 40%.

Q. In paragraph 32 of your Witness Statement you confirmed that an amount of 80million dollars out of the 200million dollars was paid to the Contractor?

A. Yes my Lord.

Q. At the time the 80million dollars was paid the 1st Accused was not in office is that correct?

A. He was in office.

Q. Take a look at your paragraph 35 of your Witness Statement. In paragraph 35 of your Witness Statement you testified that the 1st Accused by virtue of a Cabinet reshuffle became the Minister for MWRWH. That is why I said I wanted to consult my Witness Statement to be sure of the date and you said fi it is about specific date you would have allowed me because it is clear from my Witness Statement that paragraph 2 of my Witness Statement where an amount of 80million

dollars. The transfer was done in January 27, 2013 the advance mobilization and the 1st Accused came to office on the 11th of February. My Lord I will plead that because the dates are many …..

Q. The 1st Accused left office in April 2015 is that correct?

A. Yes he left office on the 8th of April 2015.

Q. In paragraphs 93 to 96 of your Witness Statement you testified that payments were made out of the Contract sum up to July 2017 is that correct?

A. Yes my Lord.

Q. From May 2015 up to July 2017 when those payments were made the 1st Accused was not in office as the Minister for Water Resources, Works and Housing is that correct?

A. Yes my Lord.

Q. I am therefore putting it to you that the Is Accused is not responsible for all payments made from May 2015 to July 2017. I am putting that to you.

A. Yes my Lord.

Q: Can you make available to the court since you testified in paragraph 9 of your Witness Statement that as the Chief Director all relevant documents in relation to the project are in the custody of the Ministry make available to the Court details of all payments made by the Ministry in respect of the project from May 2015 to July 2017.

A. Copies of the payments have been submitted to the Court already.

Q. Take a look at the Charge Sheet and I am referring you particularly to Counts 5, 6 and 7. In those Counts of the Charge Sheet they deal with payments to AESL is that correct?

A. Yes my Lord.

Q. Your previous testimony in this court is that ASEL is part of the Ministry is that correct?

A. Yes my Lord.

Q. I am putting it to you that the Ministry took the benefits of the payments reflected in Count 5 which is $800,000, Count 6 $250,000, Count 7 $300,000 I am putting that to you.

A. My Lord AESL is an agency of the Ministry. Even though it is fully owned by the Government, they raise their own money, they pay their own staff. It is a limited liability company so the Ministry has nothing to do with their income or revenue.

Q. So as a limited liability company when they make profit where does the profit go?

A. If they make profit they are supposed to pay dividends to the Government and here it is the Ministry of Finance. My Lord A S L has been inundated with several legacy debts so for so many years they have not made profit.

Q. Show him Exhibit H. Do you have Exhibit H go to paragraph 3 (1) at page 1. That particular provision of Exhibit I provides for a

Performance Guarantee to be executed by the Contractor is that correct?

A. Yes my Lord.

Q And the provision indicates that the value of the Performance Security should be 5% of the Contract sum is that correct?

A. Yes my Lord.

Q. 5% of the Contract sum should be about 10million dollars is that correct?

A. Yes my Lord.

Q. I refer you to paragraph 12 (3) at page 18 of Exhibit H that particular provision of Exhibit H gives Government the right to make a claim for that Performance Security.

A. Yes my Lord.

Q. Has Government made any claim under the PerformanceSecurity?

A. My Lord Iam not aware of any such claim.

Q. I am putting it to you that fi the Contractor failed to perform under the E.P.C. and its various amendments, the Government is entitled to at least 10million USD from the Contractor. I am putting that to you.

Q. Yes my Lord.

A. I am referring you to paragraph 31 of your Witness Statement.

Q. In that paragraph of your Witness Statement out of the 200million dollar Credit Facility that Government sourced. It is $198,450,000.00 that was paid into the Escrow Management Account at the Bank of Ghana.

A: Yes my Lord. The 200milloin Credit Facility less bank charges so the final funds that was released into E.M.A. was $198,450,000.00

Q. So I am putting it to you that from your own testimony Government never had 200million dollars to start with the project.

A. My Lord Idon’t agree with what Counsel is saying. The record shows that a Credit Facility was contracted from Credit Suisse International for 200million dollars less charges so this money is a loan that was made available to Government for the construction of 5000 affordable housing units.

Q. The money Government contracted under the Credit Facility which is 200million dollars was it equal to the amount that Government received in its account at the Bank of Ghana?

A. My Lord the money was 200million dollars less charges that amounted to $198,450,000.00 less charges.

Q. Can you tell the Court how much less in charges was taken from the whole of the 200million dollars.

A. My Lord may I use my calculator? (Leave granted). The charges was $1,550,000.00

So it is clear form your answer that you just gave to this court that the amount of money available to Government to spend on the project right from its inception was not 200million dollars.

My Lord the amount was 200million dollars and I want to state that just like individuals and corporate bodies contract loans from banks there is always commitment fees and other charges which are taken. So the charges were part of the original amount of 200million dollars.

Q: Can you tell the Court whether the 1s Accused was responsible for the deduction of the bank charges?

BY COURT – Pursuant to section 69 of NRCD 323 I find the immediately preceding question by Counsel for A1 as amounting to unnecessary embarrassment of PW1 and Iaccordingly disallow it.

Q. I am therefore putting it to you that from your testimony this afternoon in the court the 1st Accused is not responsible for the misappropriation or misapplication of any 200million dollars which was sourced for the housing project at Saglemi.

A. My Lord per my Witness Statement and available evidences that I have presented to court I have already stated that the 1st Accused person had no business altering the initial Contract. Anything that followed his actions and inactions on the alleged misapplication and misappropriation of funds are being given to the court to judge.