Ghana needs to institute proper internal control mechanisms

It appears the calls for reforms will not only be limited to the country’s electoral system but the entire public sector as a financial lawyer is urging the country to take a second look at its record keeping system.

According to Lawyer Kofi Mensah, the co-founder at the ABM Attorneys, public records must evolve around the state institutions and not people such that when these people are not around then those records can be traced. He said when the appropriate structures are put in place, it would be easy for the country to even trace documents dating as far back as the pre-independence era.

“What needs to be done on the business side even before you get to the legal side is that, every organization, especially state agencies, needs proper business control. They need proper internal control; proper record keeping and the institutions must act like institutions so that they can come within the proper legal framework and transact business.”

Mr. Mensah was speaking in an exclusive interview with the General Telegraph Business Desk following the saga of the GNPC Drill Ship, with reports that Societe Generale is claiming that they cannot trace their documents upon the excuse that after every ten years, every document is automatically deleted from their records.

Sharing his legal opinion on the sale of the GNPC Drill Ship, he said it is due to the ineffectiveness of the state institutions to properly document transactions that has blown the “whole saga” out of proportion.

“This particular issue is very interesting because you are talking about different governmental agencies that had to act in tandem to close one transaction. Legally, we need to figure out what duty each participant had. What I can say from a purely civil transactional level without getting into any criminal implication, is that someone has been negligent”

The young lawyer said it is ‘very unfortunate’ that no one has been able to make proper sense out of the transaction and sale of an asset of that nature so far and “the implication is that we run the risk of always having black holes in our transactions when we do not do this.”

“The other implication is that we can have smart people also taking advantage of the system because they know that institutional memories do not exist so they can run around in circles around the systems, which in the long run would cause the nation dearly.”

It would be recalled that last week the Managing Director of Societe Generale Bank-Ghana, Gilbert Hie said that both their offices in Ghana and France did not have any record on the $19.5 million judgment debt reportedly paid to the company after the sale of the oil ship when he appeared before the Sole Commissioner for judgment debt.

According to Mr Hie, under the France law “we keep our archives for 10 years and the rule is that we destroy them after 10 years,” Out of the money received from the sale of the ship, $19.5 million was said to have been paid to Societe Generale as judgement debt secured against GNPC in a London Court in 1999.

Lawyer Mensah believes France’s approach is not suitable for Ghana since it is a developing nation. He said regardless of what any nation chooses to have for its transaction, Ghana needs to have its own system that works best for us such that, even if a country decides to get rid of her documents that would not be our problem.

“If France chooses to do ten years that is their problem; we should even be able to go back to the 1960 constitution and make reference to it and all transactions which fell under it. That is how we develop as a nation”

Last week the Governor of the Central Bank, Dr. Henry Akpenamawu Kofi Wampah, said they are still looking for the documentation concerning the sale of the GNPC Drill ship.

“We have been asked by the Sole Commissioner to provide documentation on the sale of the GNPC Drill Ship. We are still looking for the documentation” the Governor responded when quizzed about the sale of the GNPC Drill ship during an interaction with the media to review the health of the economy at the Central Bank’s head office in Accra.

It would be recalled that when the BoG first made its appearance before the Sole Commissioner for Judgment Debt, the Chief Manager with the Banking Department, Paul Mensah–Ashun said the Central Bank had no documents backing the payment.

“My Lord, we have queried our data base extensively and there is nothing that shows that some payments were made to Societe Generale in respect of the sale of the GNPC ship. So for this particular case that we are talking about, there is nothing that we can trace about that transaction”

Dr. Wampah explained that the reason they could not find any documents at first was that they were not given the specific time frame for the transaction.

“Initially, we didn’t have any specific date for the transaction so it was a little bit difficult; we were looking over a long period.”

He was however hopeful that something fruitful will come up “But now, there is time indication as to the period so we would focus on that so whatever we find we would submit to the authority” the Governor concluded.

Also, the then owners of the Discovery 511 Drill Ship, the Ghana National Petroleum Corporation (GNPC), who had earlier said the Corporation could not produce the transaction report, gave the story a dramatic turn last Monday when they appeared before the Judgment Debt Commission. The CEO, Nana Asafu-Adjaye, who was sacked last week and replaced with Alex Mould, confirmed participating in the sale of the ship and revealed that the corporation had now unearthed some documents relating to the sale.

“The Corporation was advised by the Ministry of Energy and Petroleum about the sale of the Drill Ship, which was sold on July 17, 2001 and we have documents to that effect”, Mr Asafu-Adjaye said and submitted to the Commission.

Meanwhile, there has also been counter accusations from the two major political parties – the National Democratic Congress (NDC) and the New Patriotic Party (NPP).

The then former Deputy Energy Minister under the Kufuor Administration who led the sale of the drill ship, K.T. Hammond, is accusing the then GNPC Boss, Tsatsu Tsikata of “financial incompetence” after the Ministry of Energy & Petroleum, issued a press release to reveal that the GNPC Drill Ship was sold on the 17th of July, 2001, during the tenure of NPP. Mr. Tsikata has also responded, suggesting that both K.T Hammond and his boss, Albert Kan-Dapaah, rushed in disposing of the national asset, instead of ensuring due diligence on the claims by the French bank.

On the way forward as far as the sale of GNPC Drill Ship is concerned, Lawyer Mensah believes we should stop politicising the issue and do our best from whatever source, to the paint the correct picture as to what took place in the chain of events. He said it is only after we have been able to unravel the “real truth” that we would be able to create proper internal controls within every state institution.

“Internal controls like proper processes that guide us as to how funds should be disbursed, the paper trail, as to who should negotiate what, as to which team has oversight over what deals should be instituted, because it is only when you have that structure in place in every ministry, department or agency these things won’t take place again” he said.

This is just one example of the lack of proper control mechanisms in our state institutions that has come to the public domain. What about the ones that have still not come to the limelight yet? How long would we have to wait for the “real truth” to come out in the sale of the GNPC Drill Ship, so we can know went wrong, institute the appropriate mechanisms and learn from our mistakes so they are not repeated. Only time would tell. We must sit up as a country and put things right.