President of the Ghana Football Association Kwesi Nyantakyi is gradually sinking in the quagmire of “Mid Sea” following revelations from a recent audit of his outfit.
The audit reports followed dark clouds hanging around a purported sponsorship package signed between Nigerian mobile telecommunication giant, Glo and the private company, Mid-Sea.
The latter, according to reports, signed on behalf of the FA but allegations about malfeasance have surfaced, raising doubts about the credibility of a man whose administration has led Ghana to two successful world cups.
The issue of how Afrisat International acting through its local agent Mid Sea Limited brokered the $15 million Glo sponsorship deal for the Ghana Premier league in December 2008 has become a thorny issue in the flesh of the FA boss and some members of his administration.
The inconsistencies in statements from the members of the FA, as well as revelations by a director of Mid Sea, Professor Marian Ewurama Addy, that her outfit has never received monies for any service has only led to more questions, instead of answers.
For instance, the solicitor of Afrisat International and Mid Sea Estates Limited, Dominick Ayine, in a desperate attempt to put the matter to rest, stated in a press release that the Board of Directors of Mid Sea knew in general terms about the deal between their outfit and the FA.
However, a director of the company, Professor Marian Ewurama Addy, rebutted that claim in a subsequent rejoinder stating emphatically that the directors only got to know about the deal after the story broke in the media.
“Management must have dealt with, and received money from, the GFA for the role it played in the deal, but the directors neither dealt with nor received money from GFA, neither does the account of Midsea show any inflows from GFA,” Professor Ewurama Addy said.
Professor Addy went even further to explain that she had raised serious objections about the press release by the solicitor of the Management of Mid Sea Dominick Ayine, concerning the specific time she and the other director actually got to know about the deal.
Again, the revelations by Professor Addy contradicted what FA boss Nyantakyi had said at its earlier press conference that $450,000 less tax had been paid into the accounts of Mid Sea which represents 10% of $4.5 million of the total amount of money paid out to the FA by Glo so far. According to Professor Addy, no such monies reflected in Mid Sea’s account.
Despite all the emotive language and talk of plots, conspiracies and swindles, the central legal question here is this: did the GFA pay Mid Sea the reported 10% of the total sponsorship money?
It is instructive to note that Mid Sea Estates Limited is duly registered under the Companies Act as a business entity with its authorized business including real estate, import and export and manufacturers’ representation.
Therefore the deal the company entered into with the GFA and Afrisat International is illegal under the company’s code since section 25 states: ‘A company shall not carry on any business not authorised by its regulations and shall not exceed the powers conferred on it by this code.’
This is despite the fact that elsewhere in the code specific steps are given as to how a company can amend its regulations in order to venture into other business. Subsequent investigations by this writer have led to the fact that the FA has dealt previously with the Managing Director of Mid Sea, Anthony Cole, on at least two suspicious deals; on 1st April, 2008 ($181,687.50) and on 7th February, 2009 ($142,500.00).
However, the Auditor General has queried the FA on those payments, because there were no receipts to validate the payments.
Clearly, the GFA and the managing director of Mid Sea – Anthony Cole – have transacted business prior to October, 2008, the point in time in which the purported deal between Afrisat International-GFA on one hand and Afrisat International-Mid Sea on the other were signed.
Therefore, the earlier argument by the solicitor of Mid Sea and Afrisat International that Mid Sea took advantage of the deal to enhance its earnings and diversify its business in the face of a slump in the real estate market due to the global recession is untenable.
Mr. Cole later wrote a press release admitting he had acted without the consent of the Board of Directors of his company and begged for forgiveness, but he failed to address the relevant issues about how much money he made on the various deals he is purported to have signed with the FA. It appears some people at the FA took advantage of the naivete of Mr. Cole who was only paid peanuts while the other key actors in the deal took the chunk of the so- called agency fee.
In her earlier press release, Professor Ewurama Addy, a director of Mid Sea wondered, “Let me state also that the manager of Midsea, Mr. Anthony Cole, has been a very hardworking and trustworthy individual. I am at a loss as to how he got introduced to Afrisat Company in the first place. Only Afrisat, who has been an earlier agent of GFA – as stated in the article - and GFA would know.”
There are further contradictions on another deal involving Glo’s sponsorship of the senior male national team, the Black Stars. At its press conference in August, FA President Kwesi Nyantakyi said that the sponsorship for the Ghana Premier League and the Black Stars both involved agents (seemingly the same agents).
But doubts still surround the whole deal following revelations by former Deputy Minister of Youth and Sports O. B. Amoah that Glo’s sponsorship of the Black Stars never involved an agent during the reign of the previous government up to December, 2008. Contrary to O. B. Amoah’s assertion that he was fully aware that there was no agent on the football team deal because he was himself at the table, the Glo sponsorship for the national team was somehow eventually signed in February, 2009 with Afrisat International as the agents.
It has also emerged that Glo Ambassador Abraham Boakye introduced officials of Globacom Nigeria to the GFA in 2008. The Nigerians expressed interest in sponsoring both the league and the Black Stars but were told the FA had existing sponsorship deals with the then One-touch and MTN.
Mr. Boakye alleges that he was kicked out of the deal by the FA President on the excuse that the league clubs wanted to deal directly with Glo and not through an agent due to the cost implications.
So again, the question that arises is why the FA contracted Afrisat International as agents to secure the deal, when the deal had already been offered to them on a silver platter? After all, this was not the first time that the FA was going to negotiate a multimillion dollar deal.
Our company law prohibits companies from engaging in business not authorized by their regulations: Companies Act 25. But a cursory look at the Management Letter on the Accounts of the GFA, covering the period between 1st July, 2007 and 30th June, 2009, raises serious queries about the financial controls at the football governing body. Perhaps there are more “Mid Sea style deals” hidden in the accounts.
In summary, some officials of the FA have failed to account for monies given to them as imprest for various assignments while monies paid out to individuals and business entities for services totaling about $6million in all have not been receipted.
As at now, the queries do not legally implicate any FA official in any financial embezzlement or malfeasance but there are several relevant questions which border on questionable financial controls, morality and to some extent potentially illegal payments.
It’s puzzling to notice that $316, 301 and Gh¢ 165,696 worth of imprest which was paid out to 23 officials is yet to be accounted for despite the fact that the programmes they were intended for had been completed at the time the letter was written. By convention, the officials were supposed to have accounted for their stewardship once the programmes for which the monies were assigned for had been completed. Therefore there is uncertainty surrounding the use of the imprest, as to whether the monies were indeed used for their intended purposes or not.
In one instance, $69, 600 was paid out to a top official of the FA as appearance fees to officials who accompanied the national team for a friendly game with Australia on 4th July, 2008.
The obvious question then is what work did those officials do to be paid appearance fees? Indeed it will be interesting to find out the reasons the FA for making those payments.
To their credit, some members of the FA have retired the imprest they were given for various duties since 2007 and 2008 but the questions linger as to why they did not do the right thing a long time ago.
Furthermore, the report also states that the paying officer of the FA failed to produce receipts to authenticate payments of over $1 million dollars and over Gh¢ 8 million for goods and services procured by the FA.
The most blatant payment in the accounts had to do with the “alleged” payment of Gh¢ 8, 032, 250 into the accounts of Krypton Ghana Limited for the production of backdrop. For the uninitiated, backdrops are used to adorn rooms and the environment for special occasions and usually have written on them the name of the occasion, plus the theme and date for the programme are properly advertised on it. The more than eight million cedi paid out for that is yet to be properly accounted for.
It is mind boggling that the FA does not demand receipts for such a huge expenditure amount to authenticate the payment. For now it cannot be ascertained whether indeed the payment was made to Krypton Ghana Limited or not, but for a fact the money is no more in the accounts.
The obvious question that popped up in my mind was: why has the system not clamped down on the apparent weak financial controls at the country’s football governing body all these years?
The Management letter on the accounts of the FA also points out the fact that such weaknesses were noticed in an earlier audit of the FA.
That Sword of Damocles hangs heavily on the Internal Auditor of the FA.
The Auditor notes that the internal auditor (IA) failed to submit regular reports on the financial state of the administration but was strangely allowed to remain in his post all this while.
The IA is apparently not aware of provisions of sections of the Ghana Audit Act!! The obvious implication is that the competence of the IA is in doubt.
It’s been interesting the path the FA has chosen to address the issues raised by the management letter on the accounts and also the Glo Sponsorship deals.
From its initial reluctance to give out information on the issues, to the separate revelations of the purported roles Mid Sea Company Limited and Afrisat International played in securing the deal, and the court action by an Executive Committee Member of the FA, George Afriyie to prevent the SFO from investigating the FA President Kwesi Nyantakyi. We still await the final audit report on the accounts of the FA to draw a final conclusion on the relevant matters and I pray Nyantakyi comes clean. The FA has been reluctant to share the responses they gave to the Auditor General pursuant to the draft audit. Clearly, the behaviour of Kwesi Nyantakyi and his administration can best be likened to “fish on top of a tree”.
With elections due next year, Nyantakyi is under pressure both from within football circles and the media to explain the key issues and it is shameful that some supporters of his have now resorted to intimidation to stop the few crusading journalists in the country.
Patrick Osei Agyeman of Asempa Fm was assaulted by some known “macho men” at the Baba Yara stadium on 10th October, 2010 minutes after the Black Stars trained on the ground amidst threats to clamp down on other people like him.
You might want to ask, what crime those journalists have committed. Since the Graphic Sports broke this story in August, a cursory observation at the Ghanaian media landscape reveals that not too many journalists have been keen to look at the various issues of accountability that have been raised. The excuse most give is that the issue is politically motivated.
Well, there is no denying the fact that the negative stories might play into the hands of the opponents of the current regime, i.e. some top people in government and the other prospective candidates for the FA presidency.
However that is not sufficient reason for the media to keep mute on the issues of such national importance that are cloaked in mystery and possible corruption. After all we, journalists, are supposed to comprise the Fourth Estate and our duty primarily is to talk about the true state of affairs.
I don’t have any personal agenda against the FA, I am just doing my job in the way I was trained to do it. I am not the problem!
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