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Crime & Punishment of Thursday, 10 November 2005

Source: GNA

GNPC Board approved loan without discussing it - Tsatsu

Accra, Nov. 10, GNA - Tsatsu Tsikata, former Chief Executive of the Ghana National Petroleum Corporation (GNPC), on Thursday told an Accra Fast Track Court that the issue of guaranteeing a loan facility on behalf of Valley Farms was never discussed at the corporation's board meeting before it was approved.

Tsatsu made the remark in response to a question put to him under cross-examination by Mr Osafo Sampong, Director of Public Prosecutions (DPP), at the court's sitting in Accra.

Asked by the DPP whether the Valley Farms Project was dear to his heart, Tsatsu replied in the negative, but said, however, that he acted on the recommendations of some financial institutions, which envisaged the project's viability and made the necessary recommendations to GNPC. The former GNPC boss is standing trial for allegedly causing financial loss of about 2.3 billion cedis to the State through the loan his company guaranteed on behalf of Valley Farms.

Continuing with his evidence under cross-examination, Tsatsu told the court that at the 58th Board Meeting of GNPC, the issue about investments in Valley Farms was on the agenda, because even though the corporation itself was not engaged in cocoa farming activities, it was ready to assist an organisation engaged in the venture, so that GNPC could use its shares of the proceeds to develop the Corporation.

He stated that in order to generate financial resources in the 1990s, GNPC had to rely on proceeds that accrued from cocoa farming activities, and that was the more reason why the corporation acted on the recommendations made by some financial institutions relating to the viability of the Valley Farms Project and invested in it.

Asked by the DPP whether he was aware of a forensic audit that was to be carried out on GNPC, Tsatsu replied in the negative and said he only got to know about it through media reports.

Led in evidence by Prof. Dankwah earlier, Tsatsu briefed the court on GNPC's Financial Position in the 1990s and made reference to its Annual Report (1995-97).

He said pages 10 and 11 of the report, which touched on the corporation's balance sheet, referred to significant levels of financial charges, which the Bank of Ghana put on GNPC's accounts.

Tsatsu stated that GNPC made gains on its short-term investments with local and foreign financial institutions other than the Bank of Ghana. "Each investment earned something for the corporation, as against the situation we used to have with BOG."

Sometime in 1991, Valley Farms contracted the loan from Caisse Francaise de Developpement, but defaulted in the payment, which compelled GNPC, the guarantor, to pay it back five years later. The corporation's action, in the view of the prosecution, resulted in financial loss to the State.

Tsatsu faces another charge of allegedly investing the sum of 20 million cedis in Valley Farms, thus leading to the misapplication of public property.

He has denied the charges and has been granted bail in his own cognisance to the tune of 700 million cedis by the court presided over by Mrs Henrietta Abban, Appeal Court Judge, with an additional responsibility on the matter as a High Court Judge.

The court had adjourned proceedings to Tuesday, November 22, for the DPP to continue with his cross-examination.