Quality grain goes to govt

The Ghanaian Times reports that the Government of Ghana has taken over the assets of Quality Grain Company (Ghana) Limited.

It followed the granting by an Accra High Court on Thursday an application filed by the Attorney-General (A-G), Nana Akufo Addo, for an order to take over the company.

In an affidavit in support of the application, the A-G said that for the purpose of purchasing agricultural equipment and machinery for the company, the South Trust Bank of Alabama, USA, on November 13, 1996, extended to Quality Grain Company (Ghana), a credit of $6,196,300, with the Ministry of Finance as guarantor under the terms of a loan agreement.

The Ministry, representing the government of the Republic through its duly authorized representative, guaranteed the facility by a promissory note of November 13, 1996.

The affidavit said that a Deed of Indemnity and Floating Charge was executed between the ministry of Finance as a representative of government and the company to ensure that in the event of default by the company, when government was called upon to make good the guarantee, it would be able to recover the loan amounts from the company.

The A-G further contended that as from March 15, 1997, the due date for repayment of the first instalment of the loan the company defaulted and had persistently defaulted in its repayment obligations.

On March 15 and September 15, every year, effective from 1997, demand notices requesting the Ministry of Finance as guarantor to pay immediately in dollars the defaulted amounts plus default interest thereon calculated at 12 per cent per annum through the date of payment where applicable to designated accounts, had been served on the Minister of Finance.

The Minister had always complied with the demand to pay in accordance with the promissory note of November 13, 1996, he added.

He said that, in fulfilment of its obligations under the loan agreement and promissory notes, the Ministry of Finance had so far repaid a total of 8,152,462.31 dollars.

As a result of the enforcement of the charge on December 14, 2000, the applicant through the Attorney-General duly gave notice to the company of government's intention to convert the floating charge on the assets of the company pursuant to clause 6 of the Deed.

However, the company had made no effort to indemnify government of the Deed of Indemnity, nor had it made any effort to rectify its defaults.

Granting the application, Mr Justice Yaw Apau, the presiding judge, said that he was convinced by the submission of the A-G that the government should take over the company.