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Business News of Monday, 8 June 2015

Source: Justice Lee Adoboe

ADB used as conduit in tax exemptions for RMB's Accra Financial Centre

In the continuing investigations into the mess Ghana's Agricultural Development Bank (ADB) has been plunged into by its board and management, this team of reporters continues to receive information from sources within and outside the bank about some distasteful decisions by management and board.

The board and management are also struggling to fend off the tag of incompetence for mismanaging affairs of the ADB amidst evidence of poor financial and management decisions they have taken to the disadvantage of the bank.

This team can state emphatically that privileges of ADB were used to secure tax reliefs for the construction of the Accra Financial Centre (AFC) which was built by Agridev, a joint venture company between ADB and Rand Merchant Bank (RMB) of South Africa.
The piece of land on which edifice has been put up also belongs to the Ghanaian bank, and according to Managing Director, Stephen Kpordzie, had been valued to be worth 2.4 million dollars.

However, while the involvement of the bank in Agridev was the conduit used to secure tax reliefs from Ghana's tax authorities, beside its ownership of the land on which the AFC owns only a paltry 10 percent share holding was granted the bank in the whole property.

Furthermore, as a prospective tenant- the Anchor Tenant in the same edifice, and in spite of its so-called shareholding in the Special Purpose Vehicle-Agridev which put up the building, ADB led by Kpordzie and his board was made to part with an advance rent payment of about 7.0 million Ghana cedis even while the building was under construction.

Although figures of the tax reliefs were not available, it is believed to run into millions of Ghana cedis.

However, for all these contributions, ADB was granted a ridiculous share holding of 10 percent, which Stephen Kpordzie promises could increase to 15 percent without explaining how and when the additional 5 percent would be awarded.

Analysts and stakeholders keep wondering why, if it could raise the resources, ADB did not rather use the 7.0 million cedis down-payment it has paid to Agridev/RMB to start the developing its own property on the land which it can then rent out to other tenants while using portions it can use.

Meanwhile the bank has since January this year put on hold the granting of any loans or credit facilities to its customers.

Now as a result of the move to put all headquarters under one roof, a decision that flies in the face of security arrangements by big companies after 9/1, the other structures the bank has rented in the city have been abandoned and are lying empty since the staff have been moved into the AFC.

Even at the Achimota branch where advance payment has been made for a number of years for the lease, the rooms there have been abandoned.

Meanwhile there is the danger of the owners of those structures asking ADB to vacate even the parts they are still holding onto for banking halls in order to rent the buildings in full to other interested parties.

"We risk losing some of our niche customers to other banks that may take over these buildings as competition in the location of banks is the capital is of paramount importance to some of the banks," a worker at the bank lamented.

Tongues have continued to wag in the light of all these happenings as to the real reasons AFC was built, and why ADB is being rushed to take up four flours in the structure which will eventually be occupied by RMB which has set a June timeline to start its Ghanaian subsidiary. Enditem.
Source: Justice Lee Adoboe

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