Display options Mobile website

General News of Monday, 29 October 2012

Source: The Enquirer

How Akufo-Addo caused $12m judgement debt

Before the incumbent National Democratic Congress (NDC) administration came under constraint, in office, to pay the almost $600 million in judgment debt to various companies with court certified claims on government, the erstwhile Kufuor regime had pursued cheap political points to pay out $12 million to Delta Foods Limited, instead of an original $9 million.

Interestingly, at the center of that reckless financial assault of extra $3 million dollars on the public purse was none other than a preening pontificator called William Nana Addo Dankwa Akufo-Addo.

In March 2001, when Akufo-Addo had freshly become President John Kufuor's Attorney General, he was presented with the situation of government's remaining indebtedness of a little over $4 million to Delta Foods, being almost half of over $9 million that the Rawlings' government had partly settled.

In good faith, a lawyer for Delta Foods had proposed an out-of-court settlement that would see government forgiven interest accrual of over $35,000 on the debt principal.

But in pursuit of his government's good image, Akufo-Addo declined the offer, with the explanation that if he agreed to the settlement, it would have hurt the image of the Kufuor regime, which had taken a piggy-back on so-called hardship under the Rawlings regime into office.

Nana Addo, who is now the Presidential Candidate of the New Patriotic Party (NPP), explained that there was no way his government could have stood before the people of Ghana and explained how they could pay out a judgment debt of over $4 million.

Not even a 30th March, 2001 warning from Delta Food's Lawyer, Frank Panford that, “my clients have sought to enforce the judgment debt by initiating attachment proceedings against Ghana Governance property in the US” would persuade Akufo-Addo to forsake party comforts for the national good.

Rather than bite the bullet and come clean with Ghanaians, Nana Addo opted for a wild goose chase that eventually inflated interest on the debt and cost Ghana $12 million, instead of $9 million – he went to flog a dead horse.

Consequently, though the set off to the payment of that huge debt was from the Rawlings regime's refusal to accept corn that it had contracted Delta Foods to import in 1998, it was Akufo-Addo's ego ride to political points that hemorrhaged the public purse by $3 million more.

In the details of events leading to the sordid political choice that cost Ghana $3 million more, the genesis was a 1998 concentrating of Delta Foods by government to import 21, 000 metric tones of white maize, to augment depreciated stock that had threatened to spark inflation.

Unfortunately, after Delta Foods had imported the corn with foreign overdraft, the government had refused to accept it.

The refusal led to Delta Foods suing the government in an Accra High Court, but while the case was pending, accepted an out-of-court settlement proposal by the government.

In the details of the settlement that was later sent to His Lordship Nana Gyamerah-Tawia as consent judgment, Ghana was to pay Delta Foods GHC 20. 3 billion ($8, 587, 879 dollars) for the corn, the cost of prejudgment storage and prejudgment interest.

In addition, the government was to reimburse Delta Foods for any post judgment cost of storage, and to pay Delta Foods post judgment interest.

By January 1999, the government had still not paid Delta, so Delta sued the government in the US Court in the District of Columbia to enforce the consent judgment.

The court upheld the consent decree and awarded additional interest that brought the total amount to $9,174,005, excluding post judgment interest.

Ghana appealed this judgment in the US Appeals Court for the District of Columbia but later withdrew the Appeal to enable her to try to move the District Court to vacate the enforcement of the consent judgement.

Comments:
This article has 31 comments, give your comment