Re: Ghana Airways Charged ?25,000 For Tea & Coffee

Further to the article that appeared on ghanaweb on 11 August 2004 originally published by the Independent newspaper, entitled "Ghana airways charged ?25,000 for tea and coffee", the lawyers of Mr. E. L. Quartey, former chief executive of Ghana Airways, messers Bentsi Enchill and Letsa, have dealt with issues raised that impinge on their clients intergrity in a letter to the independent reproduced below.

The Editor
The Independent
Block 7
Weija Industrial and Commercial Estates
Accra

Dear Sir,

RE: GHANA AIRWAYS CHARGED ?25,000 FOR TEA & COFFEE

We act as Solicitors for Mr. E.L Quartey, the former Chief Executive of Ghana Airways. We refer to statements you made in the front-page article in your newspaper of August 11, 2004 titled ? Ghana Airways charged ?25,000 for Tea and Coffee?, and on Gold FM?s morning program of August 10, 2004 on the KBC Loan Facility procured by Ghana Airways during the administration of our client. We are instructed to bring to inform you that your allegations concerning the KBC Facility have no factual basis. Further, your our article was poorly researched.

Firstly, KBC?s total lending to Ghana Airways from 1997 to 2001 was made through three separate loan facilities not one. Ghana Airways accessed over $50 million over the period, and every amount disbursed was for the benefit of the airline and was properly accounted for.

You should note that under Mr. Quartey?s administration, the international financial community had such confidence in Ghana Airways that it was prepared to make successive loans to Ghana Airways on increasingly improving terms. The KBC Facility moved from an intended repayment period of one year, to three years and then to five years, with increasing financial commitments by KBC. A portion of the loans obtained was used to refinance earlier loans since they were on improved terms thereby lowering the company?s cost of capital, which is prudent in managing a modern day organization.

The suggestion that KBC charged ?25,000 for ?tea and coffee? is a scandalous fabrication. You are hereby challenged to produce any evidence that such a charge was indeed levied by KBC. Contrary to your allegation that the Forensic Auditors ?missed? this aspect of the KBC Facility, your attention is drawn to pages 91 to 99 of the Forensic Audit Report on Ghana Airways, where the auditors commented extensively on the KBC Facility. Indeed the auditors mentioned fees taken out of a direct disbursement to Ghana Airways of $2.5 million in March 2001 as facility fees, legal fees, arrangement fees and annual agency fees (no tea and coffee fees). All other disbursements made were for the sole use of Ghana Airways? refinancing and other requirements. Mr. Quartey?s rebuttal of the Forensic Audit Report unambiguously demonstrated that the fees charged were on the total facility and not on the disbursement of $2.5 million (which was a part thereof). Mr. Quartey?s rebuttal was issued on June 16, 2003, over a year ago. To date there has been NO response to it. You would do well to peruse it and enlighten yourself.

For your information, a shareholder?s resolution was obtained from the Honourable Minister of Finance for the KBC Facility (upon submission of the whole loan agreement for scrutiny by the Ministry of Finance). The shareholder?s resolution for the last KBC Facility during Mr. Quartey?s tenure was signed by the current Minister of Finance in 2001.

Our client finds the statements made in your article about KBC?s business practices with Ghana Airways during his tenure in very bad taste and has passed the information to KBC for their confirmation that during his tenure as Chief Executive there were never any irregular dealings with the airline, and for any appropriate action they may wish to take against you.

As regards what has taken place with KBC since Mr. Quartey?s departure, he is not in a position to make any comments. Those currently in authority at Ghana Airways are in the best position to comment.

We encourage and challenge you to bring forward and make public any evidence in your possession regarding any wrongdoing on Mr. Quartey?s part. We are certain there has been no wrongdoing whatsoever. Indeed you have tried over the last 18 months to mount a hopeless and scurrilous campaign against our client and his integrity. In the current precarious state of the airline those presently at its helm, the media and the Ghanaian public should be concentrating on making the airline work at least as well as it did during our client?s tenure and their attention should not be diverted by such baseless allegations.

Please be assured that our client will seek redress at the appropriate time for all the falsehoods and fabrications you have published and pronounced against him.

Yours faithfully

Bentsi-Enchill & Letsa

Cc: KBC Bank London

The Chief Executive Radio Gold
Accra


Mr. James Agyenim Boateng
Radio Gold Accra