Social Security Trust owns STC - Former head

The divested State Transport Company is owned by the Social Security and National Insurance Trust and not Vanef Consortium Limited which currently runs the company and has its colours and insignia boldly painted on the fleet of buses operating in all parts of the country.

According to Charles Asare, former Director-General of SNNIT indicted by Government forensic audit report for allegedly leading the trust to issue credit guarantee of ?77 billion to Vanef for the acquisition of STC without board approval, SNNIT has a controlling share of 92.5 per cent in Vanef Consortium Limited with Vanef Ltd and David Dorte & Company owning the other 7.5 per cent.

“The Trust also controls five out of the eight-member Board of Directors of Vanef Consortium Ltd including the Chairmanship of the Board and the position of Executive Finance Director,” Charles Asare asserted. He was reacting to the finding and recommendation by the forensic audit report, which found him culpable in the SNNIT’s guarantee for the take-over and published in Public Agenda last week.

Asare rushed to the offices of PA Communications, publishers of the Public Agenda and Weekend Agenda newspapers to clear the air, armed with a copy of a memorandum on the issue he sent to Minister of Finance, Yaw Osafo-Maafo, dated January 31, 2001.

The memo stated clearly that the deal was approved by the SNNIT board, contrary to the findings of the forensic audit team. “The Board of SNNIT at its meeting held on 10th July 2000 approved the Trust’s involvement in Vanef Consortium Limited (VCL), the company which had won the bid to acquire the former State Transport Company (STC) from the Divestiture Implementation Committee (DIC).

Explaining why Vanef has its name and insignia on the buses, the memorandum explains: “The names Vanef/STC have misled the general public to think that James Owusu Bonsu, a minority shareholder of 7.5 per cent in the transaction, is the majority’ owner and to speculate that SNNIT financed him to buy out STC. I can understand this confusion given that Owusu Bonsu, the sole owner of Vanef Limited, owns a number of companies bearing the name ‘VANEF’ such as Vanef Tours and Vanef Forex Bureau.”

The memo goes on to explain that by the time SNNIT got involved in the transaction, Vanef had already concluded the deal to buy STC and the only option available to the Trust was to buy majority shares in Vanef Consortium and seek to make the necessary changes later.

“Accordingly, after SNNIT Board’s approval for the transaction, we moved quickly to suspend the management agreement that Vanef had negotiated with STC and Greyhound Corporation of USA because the contracts were not in the interest of SNNIT. Owusu Bonsu was, however, given a two-year contract as Chief Executive, in his personal capacity in view of his experience with running transport companies and also his general experience in the tourism sector.”

The former Director-General intimated that in December 2000, “the SNNIT Board directed that the name of the company be changed to STC Company Ltd. Unfortunately, I did not have the time to execute this directive but it is not too late to change the name of the company now in order to correct the public’s misunderstanding about the transaction.”

According to Asare, the cost of the entire transaction was put at $12.4 million and ?4.98 billion. The Trust provided a guarantee cover in favour of the consortium to SSB Bank Ltd for ?18.6 billion (about $4m) as part payment to DIC. It also provided another guarantee to DIC in favour of the Consortium for the unpaid balance.”

He said the DIC liability was settled through a debt/equity swap arrangement between the Trust and the Government of 53.8 billion cedis owed it by the government to acquire STC.

The former Director-General explained that one of the major reasons behind SNNIT’s venture into the STC deals was to link up with the Trust’s interest in the hotel business to lay the foundation for a huge hospitality empire to aid Ghana’s growth as a tourist destination.

He gave the Vanef deal a clean bill of health. “To date, the company is performing profitably and we are confident that it can be turned around successfully and listed on the Ghana Stock Exchange (GES) within the next three years. Meanwhile, the Weekend Agenda would like it placed on record that the SNNIT source quoted in the original SNNIT guarantee to Vanef story was not Ernest Thompson of the SNNIT legal department.