It is a long article but WORTH reading. This is where Labour leadership is sending our moneys again..!!!
SSNIT rejects ¢5.38bn refund from Databank
Accra (Greater Accra) 27 May 2003 -
The Social
Security and Nationa ... read full comment
It is a long article but WORTH reading. This is where Labour leadership is sending our moneys again..!!!
SSNIT rejects ¢5.38bn refund from Databank
Accra (Greater Accra) 27 May 2003 -
The Social
Security and National Insurance Trust (SSNIT) has
described as unacceptable the refund of ¢5.38
billion made to it by Databank Financial Services
Limited with regard to the investment it made in
Obotan Developers Limited in 1999.
According to the trust, that amount which was
equivalent to $2.24 million in 1999 is not of the
same value today, adding that what was refunded is
equivalent to $619,034.50 which is only 27.6 per
cent of the original dollar offer price and indicated
that it will not compromise its rights in the matter
and is determined to receive its entitlement in full.
A highly-placed source at SSNIT, which disclosed
this in an interview in Accra yesterday, said the
trust is demanding either the $2.24 million or its
equivalent at the current market rate since it would
have made significant returns if the money had
been invested by it in 1999.
It said it has consistently maintained in its
correspondence with Messrs Databank Financial
Services Limited, through its solicitors, that the
offer price for the investment in the joint venture
was quoted in US dollars in February 1999, even
though payment was effected in cedis at the
prevailing exchange rate.
It maintained that any refund, therefore, in cedis,
should at least be equivalent to the original offer
price of $2.24 million when converted into US
dollars at today’s exchange rate.
It said the trust wishes to remind the public that its
line of action is aimed at asserting its civil rights in
a case such as this” and that issues requiring
criminal prosecutions, if any, do not lie with the
trust but with the Attorney General’s office.
The source said the board and management of
SSNIT has noted the public interest generated by
the report of the forensic auditors and the
investigations by the Serious Fraud Office (SFO) on
the investment of the sum equivalent of $2.24
million which was, ¢5.4 billion in 1999 made by the
trust in Obotan Developers Limited.
It said upon completion of the investigations, the
SFO informed the trust on October 7, 2002 that the
docket on the case would be forwarded to the
Attorney General for the necessary action to be
taken.
The source said the letter concluded that the trust
would be informed of any further developments and
on November 29, 2002, the SFO forwarded to the
trust a proposal by the solicitors representing
Messrs Databank Financial Services Limited, one of
the parties named in the SFO report, to buy out the
trust from the venture by refunding the sum of
¢5.38 billion paid by the trust in 1999.
The trust responded through its solicitors that while
it was desirous of seeking a resolution on the
matter, it will only do so if there is full restitution of
the original investment plus appropriate interest
that will ensure that there is not an unreasonable
dilution of the value of the original investment
made by the trust.
The source said SSNIT has made it clear to the
solicitors of Databank that although the original
offer was made to SSNIT in dollars, payment must
be made in cedis at the prevailing exchange rate.
It said "we suggested the use of an interest rate of
the London Interbank Offer Rate (LIBOR) in
addition to two per cent to accumulate the original
amount of $2.24 million from the date that the trust
effected the payment, to the date of refund".
Based on this, the source said the trust suggested
conversion of the accumulated dollar amount into
cedis at the prevailing exchange rate on the date of
the refund and this the trust felt would be in line
with the approach used in the original transactions.
Alternatively, it said the trust suggested that if
Messrs Databank Financial Services Limited insists
on using the cedi equivalent of the initial
investment, that is the ¢5.38 billion, as the
reference amount, then the interest rate to be used
to accumulate the investment to the refund date
should be the equivalent of the prevailing treasury
bill rate in addition to two per cent for the period,
from February 1999 to the refund date.
The source regretted that both options were rejected
by the lawyers of Databank who rather insisted on
making two instalment payments totalling ¢5.38 and
further suggested that the issue of interest and the
dilution in the value of the original payment should
be settled by arbitration.
It said before the two parties could resort to
arbitration, Databank, on May 13, sent a cheque for
¢5.4 billion to SSNIT and indicated that it was the
full refund.
At the prevailing exchange rate, the source said, $1
is exchanged for ¢8,700 and that the payment of
$5.38 billion the Databank is alleging to have made
as the full refund of the original purchase price is,
indeed, the equivalent of $619, 034 which is
"woefully short of the original trust investment of
$2.24 million by as much as $1,625 million.
The source said upon consultations with its external
solicitors it was decided that at this point, the
payment which Databank made constitutes part
payment of the amount due and should thus be
placed in an interest bearing Escrow Account, until
the issues have been fully sorted out.
"This stance, the source stressed, is being taken so
as not to prejudice our stated right to full restitution
of the original investments of $2.24 (¢5.38 billion)
in February, 1999.
GRi…/
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sumaila 9 years ago
it is high time Ghanaian workers raise against d injustice minted at them, it's absurd for government to imposed a trustee on workers
it is high time Ghanaian workers raise against d injustice minted at them, it's absurd for government to imposed a trustee on workers
It is a long article but WORTH reading. This is where Labour leadership is sending our moneys again..!!!
SSNIT rejects ¢5.38bn refund from Databank
Accra (Greater Accra) 27 May 2003 -
The Social
Security and Nationa ...
read full comment
it is high time Ghanaian workers raise against d injustice minted at them, it's absurd for government to imposed a trustee on workers