Gov't To Reopen PYRAM

The directors of Pyram Business Consultancy as well as those of Resource 5000, perpetrators of the worst large-scale financial scams ever witnessed in the recent history of Ghana could be facing the Fast Track Court soon.

According to Finance Minister Yaw Osafo-Maafo (MP), the culprits enjoyed an apparent honeymoon because the Director of Public Prosecution refused to present the Pyram case to the court even though it had been duly registered at a Circuit Tribunal on 22nd February 1996.

Although a Bank of Ghana letter dated 24th May 1999 informed the then Attorney General, now national chairman of the opposition NDC of the outcome of their investigations and recommended legal proceedings against the directors, the A-G’s Department took no further action. Mr. Osafo-Maafo told Parliament in an answer to a question on measures being taken to resolve the scam last Friday: “Now that the fast Track Courts are back, we intend to seek the advice of our Attorney-General to recall the two cases”.

Pyram Business Consultancy and Resource 5000 embarked on a fund exercise in the early 1990s promising a 360 per cent annual interest on money invested at a time when the Treasure bill rate was 29.05 per cent per annum. Mr. Osafo-Maafo said the Bank of Ghana (BOG) has now adopted measures to effectively sensitise the public on such risky financial adventures. Apart from this, the minister also told the House that, a new banking law would soon be introduced to deepen the financial sector and protect it from fraudsters.

“Our government believes in the rule of law and will do everything in its power to ensure that such fraud is not perpetuated in this country.” Even though some obviously over-zealous members including minority strongman, Mohammed Mumuni NDC-Kunbugu and Stephen Balado-Manu NPP-Ahafo-Ano South pushed for some form of restitution for those who incurred losses as a result of the scam, the Minister said the government would rather concentrate on the criminal aspect of the case and bring the perpetrators to book than attempt any such (populist) agenda.

Instead, the Minister encouraged individuals who lost their monies due to the operations of the companies go take legal action against the companies and lay claim to their frozen assets. The previous government had frozen the assets of the companies. Giving the background to the scam the Finance Minister blamed it on the attitude of the customers who patronized the services of the two companies in spite of public notices issued in the mass media cautioning the public to ignore their very tantalising offer.

According to Mr. Osafo-Maafo, even efforts by the BOG to create sanity were met by protects and threats from the public including massive demonstrations at the premises of BOG in Accra and Kumasi that suggested public confidence in the operations of the unlicensed companies. The public was adamant in its support for the company because of the 30% monthly rate of return on investment, which was too attractive to let go, although the Bank had explained that the scheme was not self-sustaining.

He said the Bank of Ghana directed the two groups to cease operations and refund the said savings under the scheme to customers in 1994. It was agreed that the refund exercise be done in phases to forestall any panic among their clients after which their bank accounts were frozen. The Minister said as a result of these agitation, the NDC government directed that Pyram be given some time to regularise its operations to conform to existing laws.

However after assessing the feasibility of the proposed businesses the BOG found it unsustainable and so refused them licenses to operate as saving and loans companies. Reports were then made to the police on their illegal activities for them to open the investigations that led to the commencement of prosecution on 28 April 1995. “Judicial action was however suspended after the police was directed as such by Cabinet.

The same Cabinet directive also requested the BOG to give the directors a grace period of two months to regularize their operations in line with existing laws.” He said the groups failed to conform but judicial proceeding against them never reached its logical conclusion.