Arda Turk sues GRA over asset auction, seeks court injunction

Arda Turk Ghana Limited has filed a lawsuit at the Accra High Court, and a Motion on Notice seeking among other reliefs an interlocutory injunction to restrain the Ghana Revenue Authority (GRA) from auctioning its assets illegally.

The company claims that the GRA has rejected previously agreed payment terms for duties totaling over GH¢4million (GH¢4,084,038.33) and instead plans to auction the assets to the Ghana Armed Forces (GAF).

In its suit, Arda Turk argued that under the Customs Act, the GRA does not have the authority to allocate goods that have not been cleared to any beneficiary.

GRA does not also have the power to deal with the assets in a manner not consistent with the interests of the owner/company, especially when same is going through officially sanctioned procedures to pay the appropriate duties and taxes.

The company described the GRA’s actions as exhibiting bad faith and emphasised that unless the court intervenes, GRA’s actions would cause irreparable harm to its interests.

Arda Turk is requesting the court to prevent the GRA, its agents, and officers from dealing with the company’s assets in any way inconsistent with its rights and ownership until the case is determined by the Court.

Facts of the case

In a suit filed on September 10, 2024, Arda Turk Ghana Limited explained that it had been awarded a water expansion project contract by the Ghana Water Company Limited (GWCL).

To execute the contract, its parent company, Arda Muthendislik, imported vehicles, plant, machinery, and equipment. The company was granted permission by the Ministry of Finance to clear the items on permit, pending parliamentary approval, as exempt from Customs import duties and taxes.

After completing the project, GWCL released the assets to Arda Muthendislik. Subsequently, Arda Muthendislik established Arda Turk Ghana Limited and requested customs duties and taxes assessment from the GRA for the assets.

However, while preparing to settle the duties, the company was sued by its local consultant, Jooes Company Limited. In 2019, a court issued an injunction restraining Arda Turk from moving or disposing of its assets until the case was concluded.

Disputed payment process

In 2021, the GRA assessed the duties and taxes for Arda Turk, but the company explained that it was unable to pay due to the injunction. After the court released the assets, Arda Turk informed the GRA, which issued a final assessment in 2023 amounting to over GH¢4million (GH¢4,084,038.33).

In November 2023, Arda Turk applied to pay the duties in installments, a request the GRA approved, on the condition that the company provided a bank guarantee. Arda Turk, unable to secure the guarantee, proposed an insurance bond instead, which the GRA accepted.

On March 15, 2024, the company, after payment of premium, provided the insurance bond, and after conducting due diligence, the GRA’s Risk Management Unit recommended approval.

However, after the process was approved by the Commissioner-General, the GRA later claimed that the agreement had not gone through its legal department. After further due diligence by legal department, the Commissioner-General again approved the agreement in August 2024.

Auction threat

Despite the approvals, Arda Turk claims the GRA has failed to print the tax bill to facilitate payment. Without any reasonable and tangible explanation the agreement had been terminated, the company alleges that in late August 2024, the Head of the Auction Unit at GRA, Eric Afari, informed them that the agreement had been discontinued and that GRA had seized their assets.

On September 3 and 4, 2024, Mr. Afari of GRA reportedly led a team of customs officials to take stock of the assets, with plans to allocate them to the Defence Industries Holding Company (DIHOC), a subsidiary of the Ghana Armed Forces.

Allegations of influence

Arda Turk has accused DIHOC of using its influence as a state institution to pressure the GRA into seizing its assets and allocate same to them.

According to the company, Brigadier General Benjamin Amoah-Boakye, Head of the Legal Unit of GAF, had earlier approached them in 2023 with a business proposal seeking partnership. After extensive discussions, a Memorandum of Understanding (MoU) was signed between Arda Turk and DIHOC.

However, Arda Turk claims DIHOC’s influence over GRA was an attempt to take the assets for free. Following this, the company canceled the MoU.

That’s when the Ghana Army then intensified their efforts to appropriate the assets of ADRA through the use of state machinery and GRA. Above is what has culminated in the suit and the application for Interlocutory Injunction against the GRA.