Details of the forensic audit on cash-strapped national career, Ghana Airways have revealed that former chief executive officer of the airline, Mr. E.L. Quartey Jnr. and 11 other top officials are to be sanctioned for various acts of corruption resulting in the loss of several millions of dollars to the airline.
Details, which will make every true patriot wince and wonder why fellow Ghanaians should behave in such a reckless manner has even resulted in a recommendation by the Auditors that the then board of Ghana Airway, chaired by Madam Victoria Addy, a member of the last Council of State, the executive of the airline and the Internal Audit staff “should be sanctioned for compromising the watchdog role of the Internal Audit Department and failure to initiate external auditing of Ghana Airways operations accordingly.”
The report, carried by “The Independent”, named the 11 other officers of the airline as Capt. Fordjoe, former deputy CEO (Technical), Mr. Joe Browne (Head of Engineering), Mr. Bethel Donkor (Head of Legal Services), Prof. Yansah (Former Head of Finance), Mr. Adu-Gyamfi (Former Head of Finance), Mr. Folson (former Head of Business Development), Mr. Boamah, (Head of Commercial), Mr. Fred Taylor (Head of Overseas Operations), Mr. Atta-Badu (Head of Engineering) and Mr. Apaloo (former Board Member).
“The details of the forensic audit shows even the untrained management eye that a reckless and wanton dissipation of funds, abdication of responsibility and several other untoward management practices are the cause of Ghanair’s woes.”
The over 400-page document which was prepared by Messrs World Wide Investment Company Limited, an Accra-based consultancy firm, fingers the 12 executives of Ghana Airways for various acts of omission and commission in aircraft acquisition, insurance claims/disbursement, maintenance contracts, aircraft leasing, in-flight entertainment services, loans disbursement, executive remuneration and IOUs, discounted tickets, free rentals and internal audit.
On Aircraft acquisition, the report aid among others that; “Ghana Airways management willfully acquired two DC9 aircraft from Avensa which were unreliable and the components fit list which were not compatible with DC9 spare parts being held at Ghana airways. This compelled Ghana Airways to enter into spare parts sale and exchange agreement with A.J. Walters.”
The then Ghana Airways management provided no authentic final signed invoices for the acquisition of the said aircraft, according to the forensic audit.
On the acquisition of those same aircraft, the forensic audit states, “the 2DC9s were bought for US$7.65 million, but the total of transfers to the suppliers so far identified amounts to US$6.65 million. Moreover Messrs. Folson and Adu-Gyamfi under whose stewardship the aircraft were acquired have given the total acquisition cost at US$5 million.”
This obviously shows an unaccounted for difference of US$1.65 million and the forensic audit recommends that Capt. Fordjoe, Mr. Browne and Quartey should be sanctioned for acquiring unreliable aircraft incompatible with Ghana Airways’ spare parts stock and also assist in ascertaining the actual cost of the aircraft and the difference recovered to Ghana Airways chest.
On the acquisition two DC10 aircraft, the forensic audit states that the aircraft were acquired from Malaysia Airlines at the cost of US$27 million, which is significantly above the sourced price from Airclaims International (US$20 million) and the US$25 million thus resulting in overpayment of 2million.
The recommendation of the auditors is, “Mr. E.L. Quartey and Capt. Fordjoe should be sanctioned for acquiring the aircraft at 2million dollars over and above the recommended price of the Ghana High Commission in Malaysia.”
Mr. Joe Browne and Capt. Fordjoe are also to be sanctioned for awarding a contract to Malaysian Airlines to undertake extra works on the two DC9 aircraft without a quotation, resulting in an income loss of US $1.5 million to Ghana Airways as the Malaysians refused to release the aircraft with a claim that Ghanair owed them US$2.34 million. Ghanair had made a provision of US$250,000 for the extra works.
On insurance claims, the forensic audit recommends that Messrs. Quartey, Folson, Alex Sykes, Tim Stevens, Boamah and Taylor should be sanctioned and surcharged with the cost of an extended lease of an aircraft from million air.
Messrs. Quartey and Folson are also to provide details on the utilization of insurance proceeds, particularly concerning a US$1.5 million insurance claim in the airline’s London deposit accounts.
In one case, according to the forensic audit, the insurance money should have gone into aircraft acquisition or into acquisition of revenue accounting software, but the management did otherwise.
In another instance, according to the forensic audit, the Ghanair management under E.L. Quartey misapplied US$5 million, part of which should have been used to settle the debts arising out of the maintenance of the DC9 aircraft at Naples, Italy.
As a result of the non-payment of the maintenance debt on the DC9, the aircraft was seized for over 11 months at Naples, but the management chose to lease an aircraft from Million Air at the cost of US$4.56 million in April 2001 on an extended lease.
The forensic audit also found out that in a clear case of unauthorized expenditure, Capt. Fordjoe, Messrs. Atta Badu, Joe Browne and E.L. Quartey, caused Ghana Airways to lose US$3.7 million for routine C-checks (a form of maintenance checks) on the airline’s DC9 fleet.
In one instance in 1999, a C-check for Ghana Airways’ DC 9-9G-ADT which should have cost US$400 rather cost $777,570, being 87 per cent above the normal service charge.
In another instance, also in 1999, the same check on DC-9-9G-ADU cost the airline $1,463,111 instead of $400,000 representing 252 per cent of the normal cost for such service charge.
All these payments were made to Atitech in contravention of board directives to the said officials to submit C-check quotations from Atitech above the normal C-check cost of $400,000 to it for approval.
Capt. Fordjoe and Mr. Quartey are to be sanctioned and surcharged with $6,095.51 for leading a defective DC10 under contract from Clipper Corporation (a special purpose company set up for the deal). $3,465,000 of the amount to be surcharged represents 15 months extension of the lease beyond the contractual period.
The frequency of breakdowns arising from defects on the aircraft let to a total loss of $6,095,157 to Ghana Airways. The forensic audit report said the Auxiliary Power Unit of the leased DC10, which was defective, led to a loss of $62, 101 to the airline, whilst a defective engine thrust reverse fan door on the same aircraft led to a loss of $309,448. The same aircraft caused a loss of $610,959 to Ghanair because of defective AFT fix cowls.
Details of the forensic audit on cash-strapped national career, Ghana Airways have revealed that former chief executive officer of the airline, Mr. E.L. Quartey Jnr. and 11 other top officials are to be sanctioned for various acts of corruption resulting in the loss of several millions of dollars to the airline.
Details, which will make every true patriot wince and wonder why fellow Ghanaians should behave in such a reckless manner has even resulted in a recommendation by the Auditors that the then board of Ghana Airway, chaired by Madam Victoria Addy, a member of the last Council of State, the executive of the airline and the Internal Audit staff “should be sanctioned for compromising the watchdog role of the Internal Audit Department and failure to initiate external auditing of Ghana Airways operations accordingly.”
The report, carried by “The Independent”, named the 11 other officers of the airline as Capt. Fordjoe, former deputy CEO (Technical), Mr. Joe Browne (Head of Engineering), Mr. Bethel Donkor (Head of Legal Services), Prof. Yansah (Former Head of Finance), Mr. Adu-Gyamfi (Former Head of Finance), Mr. Folson (former Head of Business Development), Mr. Boamah, (Head of Commercial), Mr. Fred Taylor (Head of Overseas Operations), Mr. Atta-Badu (Head of Engineering) and Mr. Apaloo (former Board Member).
“The details of the forensic audit shows even the untrained management eye that a reckless and wanton dissipation of funds, abdication of responsibility and several other untoward management practices are the cause of Ghanair’s woes.”
The over 400-page document which was prepared by Messrs World Wide Investment Company Limited, an Accra-based consultancy firm, fingers the 12 executives of Ghana Airways for various acts of omission and commission in aircraft acquisition, insurance claims/disbursement, maintenance contracts, aircraft leasing, in-flight entertainment services, loans disbursement, executive remuneration and IOUs, discounted tickets, free rentals and internal audit.
On Aircraft acquisition, the report aid among others that; “Ghana Airways management willfully acquired two DC9 aircraft from Avensa which were unreliable and the components fit list which were not compatible with DC9 spare parts being held at Ghana airways. This compelled Ghana Airways to enter into spare parts sale and exchange agreement with A.J. Walters.”
The then Ghana Airways management provided no authentic final signed invoices for the acquisition of the said aircraft, according to the forensic audit.
On the acquisition of those same aircraft, the forensic audit states, “the 2DC9s were bought for US$7.65 million, but the total of transfers to the suppliers so far identified amounts to US$6.65 million. Moreover Messrs. Folson and Adu-Gyamfi under whose stewardship the aircraft were acquired have given the total acquisition cost at US$5 million.”
This obviously shows an unaccounted for difference of US$1.65 million and the forensic audit recommends that Capt. Fordjoe, Mr. Browne and Quartey should be sanctioned for acquiring unreliable aircraft incompatible with Ghana Airways’ spare parts stock and also assist in ascertaining the actual cost of the aircraft and the difference recovered to Ghana Airways chest.
On the acquisition two DC10 aircraft, the forensic audit states that the aircraft were acquired from Malaysia Airlines at the cost of US$27 million, which is significantly above the sourced price from Airclaims International (US$20 million) and the US$25 million thus resulting in overpayment of 2million.
The recommendation of the auditors is, “Mr. E.L. Quartey and Capt. Fordjoe should be sanctioned for acquiring the aircraft at 2million dollars over and above the recommended price of the Ghana High Commission in Malaysia.”
Mr. Joe Browne and Capt. Fordjoe are also to be sanctioned for awarding a contract to Malaysian Airlines to undertake extra works on the two DC9 aircraft without a quotation, resulting in an income loss of US $1.5 million to Ghana Airways as the Malaysians refused to release the aircraft with a claim that Ghanair owed them US$2.34 million. Ghanair had made a provision of US$250,000 for the extra works.
On insurance claims, the forensic audit recommends that Messrs. Quartey, Folson, Alex Sykes, Tim Stevens, Boamah and Taylor should be sanctioned and surcharged with the cost of an extended lease of an aircraft from million air.
Messrs. Quartey and Folson are also to provide details on the utilization of insurance proceeds, particularly concerning a US$1.5 million insurance claim in the airline’s London deposit accounts.
In one case, according to the forensic audit, the insurance money should have gone into aircraft acquisition or into acquisition of revenue accounting software, but the management did otherwise.
In another instance, according to the forensic audit, the Ghanair management under E.L. Quartey misapplied US$5 million, part of which should have been used to settle the debts arising out of the maintenance of the DC9 aircraft at Naples, Italy.
As a result of the non-payment of the maintenance debt on the DC9, the aircraft was seized for over 11 months at Naples, but the management chose to lease an aircraft from Million Air at the cost of US$4.56 million in April 2001 on an extended lease.
The forensic audit also found out that in a clear case of unauthorized expenditure, Capt. Fordjoe, Messrs. Atta Badu, Joe Browne and E.L. Quartey, caused Ghana Airways to lose US$3.7 million for routine C-checks (a form of maintenance checks) on the airline’s DC9 fleet.
In one instance in 1999, a C-check for Ghana Airways’ DC 9-9G-ADT which should have cost US$400 rather cost $777,570, being 87 per cent above the normal service charge.
In another instance, also in 1999, the same check on DC-9-9G-ADU cost the airline $1,463,111 instead of $400,000 representing 252 per cent of the normal cost for such service charge.
All these payments were made to Atitech in contravention of board directives to the said officials to submit C-check quotations from Atitech above the normal C-check cost of $400,000 to it for approval.
Capt. Fordjoe and Mr. Quartey are to be sanctioned and surcharged with $6,095.51 for leading a defective DC10 under contract from Clipper Corporation (a special purpose company set up for the deal). $3,465,000 of the amount to be surcharged represents 15 months extension of the lease beyond the contractual period.
The frequency of breakdowns arising from defects on the aircraft let to a total loss of $6,095,157 to Ghana Airways. The forensic audit report said the Auxiliary Power Unit of the leased DC10, which was defective, led to a loss of $62, 101 to the airline, whilst a defective engine thrust reverse fan door on the same aircraft led to a loss of $309,448. The same aircraft caused a loss of $610,959 to Ghanair because of defective AFT fix cowls.
