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Business News of Thursday, 4 May 2017


SSNIT ignores debtors owing GHC477m

The new management of the Social Security and National Insurance Trust (SSNIT), appears disinterested in a whopping GH¢477.3 million loan it granted to eight public and private institutions and organisations, but busily chasing paltry sums owed by private companies by way of workers’ social security contributions.

The Auditor-General’s 2015 Audit Report to Parliament, revealed that the collaterals provided by the defaulting institutions, have not been assessed by SSNIT for it to know, whether or not, the collaterals can offset the loan amounts.

The list of defaulters as of December 31, 2014, is: FOS Aluminium Limited – GH¢1, 366, 563, 79; Bridal Trust Limited – GH¢1,114,500.23; Ghana Leasing Company Limited – GH¢5,866,362.68; the Ghana Road Fund – GH¢261,698,706.24; shareholders advance (Bridal Trust) – GH¢193,129.40; shareholder advance (Intercity STC Coaches) -GH¢ 20,292,258.13; Intercity STC Coaches Limited – GH¢10,712,512.20, and Golden Beach Hotels – GH¢ 176,075,168.

Interestingly, the same SSNIT management, is in court with Engineers and Planners (E&P) a company owned by Ibrahim Mahama, over its workers’ social security contributions demanding the sum of GH¢2 million, which includes actual arrears of GH¢668,754.75 and penalty of GH¢387,709.31 which was imposed by SSNIT.

It is as though, SSNIT, is only interested in collecting workers’ social security contributions to give them out as loans to private individuals and companies, but won’t mount any effective strategy towards the retrieval of these loans.

Industry players, have attributed the situation to the low pension money Ghanaian workers collect on retirement.

Indeed, the Public Affairs Director of SSNIT, Eva Amegashie, confirmed to Accra-based Citi News, that Engineers & Planners Company Limited has settled arrears a day ahead of the SSNIT Saturday court on April 29, 2017. But she said the criminal offence was still pending, with the next hearing scheduled for May 13, 2017.

“Engineers and planners’ indebtedness was settled a day before the court hearing on Saturday. They paid on Friday when the court hearing was on Saturday. But the criminal offence is still pending because they were taken to court and it is the court that will decide on the final verdict on Saturday, 13th of May, 2017,” Mrs. Amegashie, said.

E&P, has since settled all it arrears. But this has not stopped SSNIT from dragging the company to court over the payment, saying E&P breached the National Pensions Act, 2008 (Act 766), and the National Pensions (Amendment) Act 2014 (Act 883) when it failed to pay employee contributions.

The payment plan with SSNIT, was to settle GH¢1,056,464.06 in 12 monthly installments from February 2017 ending in January 2018.

E&P was to pay the first installment in February 2017. But it says it missed the payment date by two days. Nonetheless, the company says it has settled all the debt in three months.

At a hearing in a specialized SSNIT Court in Accra last week, the lawyers for E&P, told the magistrate Afua G. Sackey that, they were under “the impression that once that has been done, there will be no legal action’’.

Auditor-General’s 2015 Audit Report to Parliament, signed by Auditor-General, Richard Q. Quartey, was for audited accounts of SSNIT for the period January 2013 to December 2014.

“We noted that loans granted to eight private, public institutions and organisations were not paid back. We also noted that collaterals provided by these loan defaulters were not valued and so management cannot assess whether the loans are recoverable from the sale of the collaterals,” it said

The report noted that the SSNIT management’s inability to value and perfect the collaterals provided by the organisations might cause the trust to lose funds, which might eventually affect its ability to pay pensions in the future and in a timely manner.

The report recommended that the management of SSNIT should take the necessary steps to recover the loans, as well as strengthen its recovery efforts.

“They should also value and perfect collaterals covering these loans, so that recovery can be made from the sale of the collaterals,” it recommended.

According to the report, the management of SSNIT responded that “they have obtained judgement in court to recover the amount involved with FOS Aluminium Limited and Bridal Trust and, therefore, ordered for judicial sale of the mortgaged properties (land and building)”.

“Management has also obtained judgement against the Ghana Leasing Company Limited and ordered for the sale of the leased assets which were acquired with the loan.

“With Golden Beach Hotels, the loan amount has been converted into shares.

“For the Ghana Road Fund, a final demand notice has been sent to the Ministry of Finance and the Ghana Road Fund Board to pay the outstanding amount,” the report pointed out.

The report also noted that SSNIT’s fixed deposits with the Ghana International Bank (GIB), totalling £620,000 (GH¢2,788,992.00), were not supported by a security assignment, contrary to SSNIT’s own practice of fixed deposits being backed by securities.

“This anomaly occurred as a result of management’s decision to convert dividend paid by the bank into fixed deposits in order to earn interest. In the event of a default, SSNIT stands to lose its investment, since there was no security to rely on,” it noted.

The Auditor-General, therefore, recommended that SSNIT should request the GIB to back the fixed deposits with securities, so that in times of default, SSNIT could fall on the security to redeem the amount.

“Management said they had written to the bank to seek clarification on assignment of security for fixed deposits for their next line of action and in conformity with their domestic fixed deposit placements,” the report said.

The report, which has been presented to the Speaker of Parliament, in accordance with Article 187(2) of the 1992 Constitution, highlights the audit of the accounts of public boards, corporations and other statutory institutions for the period ended December 31, 2015.

It highlights the significant findings arising from the audit of the financial operations of public boards, and corporations and other statutory institutions, in accordance with Section 13 of the Audit Service Act of 2000 (Act 584).

It includes details of financial errors and irregularities arising out of the breakdown of internal controls and provides recommendations, where possible, to rectify the weaknesses identified in the financial control systems.

Meanwhile, E&P, will re-appear before the SSNIT Court presided over by magistrate Ms Afua G. Sackey, on Saturday, May 13, 2017.

E&P, has released a statement explaining circumstances leading to the court proceedings.

The construction company, explained that on December 22, 2016, it entered into a negotiated agreement with SSNIT for the payment of arrears of social security contributions of GH¢1,601,051.78.

The amount is the contribution of employees of the company between February and July 2015, June to August 2016 and October 2016, as well as penalty amount for failure to make the payment.

After it delayed in honouring its February 2017 installment by two days, SSNIT on March 2, wrote to E&P to serve notice that it had abrogated the negotiated agreement due to the failure of the company to honour its first monthly obligations.

According to the statement, E&P, made a request for SSNIT to reconsider its decision to abrogate the negotiated agreement, but SSNIT declined the request.

Below is the statement


On 22nd December 2016, SSNIT entered into a negotiated agreement with Engineers & Planners as it does with all clients for the payment of arrears of social security contributions of GHc1,601,051.78. By the terms of the agreement, E&P were required to make 12 monthly instalments commencing February 2017 ending in January 2018. As at 28th April 2017, E&P had made a total payment of over GHc 2 million (GHc2,723,212.36) in full satisfaction of all outstanding arrears and penalties. JUST TWO DAYS DELAYED PAYMENT – On March 2 2017, SSNIT wrote to E&P to serve notice that it had abrogated the negotiated agreement due to the failure of the company to make the instalment payment for February 2017, as a result of two (2) days of delay in paying the first instalment.

E&P informed SSNIT that it had made efforts to make the payments for February as agreed but for unexpected delays in their receivables on current contracts and convincingly committed to paying. A promise it has fulfilled.

E&P further made a request for SSNIT to reconsider its decision to abrogate the negotiated agreement. SSNIT declined the request.

Instead, on 13th April 2017, a summons was issued to E&P to appear before the District Court on 29th April 2017 to answer a complaint of failing to pay SSNIT contributions of GHc668,754.75 and penalty of GHc387,709.31 totalling GHc1,056,464.06.

Once again it is worth noting that, E&P has paid over GHc 2 million (GHc2,723,212.36) in full satisfaction of all outstanding arrears and penalties.

Counsel for Engineers and Planners has informed the court that the company has fully paid off the outstanding amounts due SSNIT.