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General News of Monday, 24 May 2010

Source: The Enquirer

GIA's $55m Own Goal

A dubious business plan, an otherwise profitable business opportunity, a corrupt and technically inept and bankrupt management, a dodgy financing package and a $55 million debt ridden Ghana International Airlines (GIA).

The Former Head of Maintenance and Engineering for Ghana International Airline (GIA), Mr. Len Hobbs has blown the whistle on the darkest secrets of GIA, giving the nation an inside view on why the airline was doomed before takeoff.

According to a four page document, written by Mr. Hobbs dated January 6, 2009, the US based Aviation Expert revealed that GIA was “guaranteed to fail by launching the company with a management team with extremely limited operational experience, dubious and questionable business and personal ethics, a business plan which was incoherent and incomplete”

Mr. Hobbs who has never hidden his dislike about the way and manner the airline was operated, said the entire GIA/USA approach to operating an airline was a “PONZI SCHEME” which was never intended to be the business plan the company would hopefully and eventually evolve into.

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Mr. Hobbs who still believes that GIA was and still is a profitable venture, noted that the so-called financiers whom the government of Ghana claimed at the time were going to finance the operations of the airline rather turned around to creamed off cash from the coffers of the company for their own use.

””The Sentry Group never had funding to launch an airline. They never put any money into the company and did not have access to funding. They left Ghana with more than $3M fraudulently diverted into their accounts” Mr.Hobbs revealed. The former Maintenance Engineer of Ghana International Airlines further observed that “The previous management group of GIA was an ethically corrupt, managerially inept, and operationally inexperienced. They took a potentially good (not so great) business opportunity and chose to operate a corrupt enterprise as opposed to a legitimate business. The result is obvious. The correction is optional”

Mr. Hobbs for example noted that the initial lease of aircraft from Ryan International Airlines was a “hand Shake” agreement which funneled $100, 000 per month to the five members of the GIA management team. The Government of Ghana provided most of the funding for the aircraft lease payments” he added.

Mr. Hobbs continued that “Each and every payment made to Ryan International, until the company terminated it’s relationship with GIA, regardless of the amount, included a percentage of commission paid to the management team” The Enquirer put these allegations and other questions to the management of Ryan International, in an email directed at the Chief Executive of Ryan International Airlines, Ron Ryan, but there was no response.

Hobbs, a Texas based aviation expert, noted that “the city of Houston, Texas USA, expressed interest in assisting GIA in providing a non-stop air service from Accra. They have voiced support to subsidize the operation for a limited time. This proposal was offered to the original management team of GIA and it was rejected.. because there was no inclusion of ‘Commissions” to be paid to GIA management.

There have been concerns that the $55M debt portfolio of Ghana International Airlines was selficted.

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