…No ‘Escrow Account’, No ‘Special Purpose Company’ (SPC), No Binding Offer Of Funds From Bank Austria!

Tongues are wagging over Mr. Alfred Agbesi Woyome’s wild claim that he “arranged through Bank Austria Creditanstalk a total amount of €1,106,470,587.00 for the stadia projects in addition to the construction of six hospitals and a cobait 60 plant and tissue culture project” as contained in his Statement of Claim filed in the Court on April 19, 2010.

The New Crusading GUIDE’s sources at the Ministry of Youth and Sports (then Education and Sports), the Ministry of Finance and Economic Planning, the Bank of Ghana (BoG) and the Controller and Accountant-General’s Department, have expressed surprise that such a colossal amount of money could have been arranged and made available for the benefit of Ghana, without feeling its impact on the country’s economy or within the corridors of the Central Bank (BoG), the Finance Ministry, the Controller and Accountant-General’s Department and the Office of the Auditor-General.

“Such a colossal amount of money cannot be at the disposal of the country, in or out of the country, without any serious, concrete, verifiable paper trail confirming its availability, at the Bank of Ghana and the Finance Ministry. Again disbursement or utilization of any or all of it cannot also be effected without the involvement of the Controller and Accountant-General, and subsequently the auditing focus of the Auditor-General. As we speak to you now, 6 years after the alleged arrangement of that huge amount by Mr. Woyome, we are yet to see any such concrete or verifiable paper trail confirming that he (Woyome) successfully completed the alleged financial engineering services to the Government of Ghana for which he should be paid 2% of that colossal amount (€1.2bn)”, intimated our BoG sources who spoke to our team of special investigators on condition of strict confidentiality.

Mr. Woyome, in his April 19, 2010 Statement of Claim said that “after the Republic of Ghana won the bid for the right to organize and host the 2nd MTN Africa Cup of Nations he led a Consortium named Waterville which successfully bid and was awarded the contract for the construction of 5 new stadia and rehabilitation of the Ohene Djan, Baba Yara and El-Wak sports stadia in April 2006”.

He claimed the said contract was signed on 26th April, 2006.

He also claimed that “prior to making the said credit facility available for the tournament, an evaluation team appointed by the Ministry of Finance had adjudged the finance offer from Bank Austria Creditantsalt arranged by the Plaintiff-led Consortium of M-Power Pak/Austro Invest/Waterville Holdings as the most competitive and thus recommended their offer to the Government of Ghana”.

He alleged that “for his financial engineering services the government finally agreed to pay him two per cent (2%) of the total project cost”. He neither specified which Administration (either the Kufuor Administration or the Mills Administration) had agreed to pay him the two per cent (2%) of the total project cost nor provided any documentary evidence to support his claim that the Government of Ghana (GoG) (either under Kufuor or Mills) had made such a commitment as stipulated in his Statement of Claim.

Mr. Woyome and his advocates have subsequently sought to validate his (Woyome’s) claim against the Government of Ghana (GoG) by reference to 4th May 2005 letter signed by a former Deputy Finance Minister, Mr. Kwaku Agyeman-Manu, insisting that the Attorney-General had “reviewed the document and concluded by a letter dated 29th April, 2010 addressed to the Minister of Finance and Economic Planning that that document created a binding contract between the Government and the Defendant (Alfred Agbesi Woyome) as a result of which Defendant was entitled to payment”. (See Woyome’s Amended Statement of Defence and Counter-Claim Pursuant to Order 16 Rule 3((1) of C.I.47 dated October 11, 2010).

He argued that Agyeman-Manu’s letter “was an election by the Government at the time not to be responsible for any expenses that would be incurred by the Defendant (Woyome) in the course of his financial engineering but same did not refer to the obligation of the Government arising out of the successful completion of the financial engineering”.

“In any event, the Government elected to be responsible for the payment for the services rendered by the Defendant (Woyome) at its own election by coming to an agreement to pay the 2% of the amount to the Defendant”, Woyome further articulated without detailing which Government (Administration) made that commitment; when, where and how.

Incidentally, the Attorney-General’s case for the reversal of 4th June, 2010 Terms of Settlement which arose out of the 24th May, 2010 final judgement of the Court presided over by Justice Tanko, is predicted on the same 4th May, 2005 letter signed by Mr. Kwaku Agyeman-Manu, a Deputy Finance Minister in the Kufuor Administration.

The Attorney-General is insisting that “the Terms of Settlement had been procured by mistake because the then Government per a letter dated 4th May, 2005 signed by a Deputy Finance Minister, Mr. Agyeman-Manu had stated that Government did not take responsibility and was not liable for any transaction entered into by the Defendant and that the Defendant’s role in the transaction did not create any legal relations, with the Government of Ghana”.

A copy of Mr. Agyeman-Manu’s letter sighted by this paper, emphasised in its concluding paragraph, that “We wish to further add that this Ministry and Government of Ghana does not take any responsibility legal or otherwise for any deal, contractual or otherwise entered into by Mr. Alfred Woyome, Vamed Engineering Gmbh & Co. KG do not represent this Ministry nor the Government of Ghana in any capacity whatsoever”.

Mr. Agyeman-Manu’s “letter of introduction” was addressed to Mr. Robert Denks or Mr. Gerhard Berger (Raiffeisen Zentral Bank), Mag. Gunter Themer (Bank Austria Creditanstalk AG) and Mr. John Ritcher (Exim Bank, Washington, D.C.), and copied to the Minister of Finance, the other Deputy Finance Ministers, the Chief Director of the Finance Ministry and the Head of the ADMU, Ministry of Finance & Economic Planning.

Yet another document which Woyome and those who believe in his cause, have been floating around in support of his claim is a Memorandum the CAN 2008 Sub-Committee on Finance, chaired by Mr. Lionel Van Lare Dosoo, then Deputy Governor, Bank of Ghana, submitted to the Minister of Education and Sports, Yaw Osafo-Maafo on July 22, 2005, in which the Sub-Committee, after evaluating the financial proposals from two shortlisted firms, VAMED and EMSAS/EPIFERM, ranked the former number one in terms of “the credibility, viability, timeliness and current status of the financial package…”.

The Van Lare Dosoo Sub-Committee, while indicating that VAMED Engineering had secured a letter of intent from MIGA as a potential guarantor, however noted that “processes to be met by both Government of Ghana and VAMED could span between three to four months, thus a potential source of delay”.

While proposing that VAMED Engineering be contacted immediately for further discussions in view of the lengthy processes required to secure the MIGA Guarantee, the Van Lare Dosoo Sub-Committee also recommended “AN ALTERNATIVE OPTION WHERE THE GOVERNMENT OF GHANA CONSIDERS THE POSSIBILITY OF SECURING ITS OWN LINE OF FUNDING”.

Significantly, a Financial Proposal Matrix on VAMED Engineering and EMSAS/EPIFERM attached to the Sub-Committee’s Evaluation Report, underscored that the ‘NOTICE OF REGISTRATION’ ISSUE BY MIGA WAS “NOT A COMMITMENT BY MIGA TO ISSUE A GUARANTEE AND DOES NOT IMPLY A JUDGEMENT OF THE INVESTMENT PROJECT”.

A final underwriting decision can only be made by MIGA on the basis of complete information to be provided in the Definitive Application for Guarantee, which was yet to be made by VAMED, the CAN 2008 Sub-Committee on Finance, underscored.

On the status of the Letter of Support provided by the Bank of Austria, the Sub-Committee commented thus: “LETTER OF SUPPORT IS NOT A BINDING OFFER OF FUNDS BUT ONLY INDICATIVE TERMS OF CONDITIONS. LETTER OF SUPPORT VALID TILL SEPTEMBER 30, 2005”.

Interestingly, the amount VAMED had indicated it was sourcing from Bank Austria, was Euro 764,117,646.00; 85 per cent of which was to be in the form of ‘credit facility’ and 15 per cent concessional. The conditions were: ‘subject to MIGA Guarantee; IMF approval of credit terms, setting up of Special Purpose Company by Government of Ghana (GoG); Government of Ghana (GoG) issuing irrevocable payment to lender (3.75% p.a. fixed) and MIGA charges 2.1% p.a. upfront.

The CAN 2008 Sub-Committee on Finance, concluded that VAMED Engineering’s financial proposal was supported with credible documentation and institutions; adding that Bridge Financing arrangements had also been made to overcome time lags, but no documentation was made available to authenticate the arrangements.

“Current status requires GoG procedures and MIGA procedures which could affect the timeliness”, the Sub-Committee underscored.

As Woyome himself argued in his April 19, 2010 Statement of Claim, the basis for his claim against Government of Ghana (GoG) is the April 26, 2006 contract(s) between Waterville and the Republic of Ghana. These Contracts for the rehabilitation of the Ohene Djan, the El-Wak and Baba Yara stadia, had absolutely nothing to do with VAMED Engineering which had already assigned its rights and obligations to Waterville on July 1, 2005, before the tendering process got underway. The April 26, 2006 contract stipulated that “the financial contract arranged by the Contractor shall be an annex to this Contract, and shall be signed between the Government of Ghana, Ex-Im Bank, USA, Multilateral Investment Guarantee Agency (MIGA) of the World Bank and the lender”.

Bank Austria which Woyome claims in his April 19, 2010 Statement of Claim to have been the source of the total amount of €1,106,470,587.00 that he allegedly arranged and made available to Ghana, according to a Waterville correspondence sighted by The New Crusading GUIDE, HAD WITHDRAWN FROM THE PROJECTS BEFORE THE GHANAIAN GOVERNMENT TERMINATED THE APRIL 26, 2006 CONTRACT(S) WITH WATERVILLE.

Audrea M. Orlandi, Managing Director of Waterville on June 21, 2006 wrote a letter titled “STADIA PROJECTS IN GHANA” to Ghana’s Minister of Finance and Economic Planning (Attn: Deputy Minister (B) of Finance and Economic Planning, Dr. Akoto Osei, and copied to the Minister of Education, Science and Sports (Attn: Mr. O.B. Amoah), the Consultants for the projects, the Building Industry Consultants (BIC) (Attn: Mr. Francis Addo), indicating that “BANK AUSTRIA, AS YOU MAY BE AWARE, WITHDREW FROM THE PROJECTS”.

Our sources at the Bank of Ghana (BoG), Ministry of Finance and Economic Planning (MoFEP), Ministry of Education and Sports have all intimated to us that that the “Escrow Account” and Special Purpose Company (SPC) which were conditions for the actualisation of the financial engineering that Waterville was contracted to undertake, were never brought into being. The “Escrow Account” was to be established by the Employer (Ministry of Education and Sports) in line with Clause 6 of the April 26, 2006 Contract. The Contract Price was to be paid to the contractor out of the said “Escrow Account”, to be established by the Employer at a West European Bank, acceptable to the Contractor according to a tripartite agreement to be concluded between the Employer, the contractor and the said West European Bank”.

“NO ‘ESCROW ACCOUNT’ WAS ESTABLISHED; NO SPECIAL PURPOSE COMPANY (SPC) WAS FORMED; NO €1.2BN WAS ARRANGED AND MADE AVAILABLE ANYWHERE FOR THE USE OF EITHER THE EMPLOYER OR CONTRACTOR OR BOTH RELATIVE TO CAN 2008 STADIA PROJECTS OR ANY OTHER PROJECTS IN GHANA OR ELSEWHERE. THAT IS THE BOTTOMLINE, AND SO WHAT IS THE BASIS OF WOYOME’S CLAIM AGAINST GHANA GOVERNMENT SIX OR SEVEN YEARS AFTER THE TENDERING PROCESS WHICH HE CLAIMED WAS WON BY A CONSORTIUM HE PUT TOGETHER AND LED?”, queried a Bank of Ghana (BoG) Official.

Indeed, The New Crusading GUIDE has uncovered a document dated 16th September, 2008 from the Building Industry Consultants Limited, the Supervisory Consultants for the CAN 2008 Stadia Rehabilitation Project in which the Consultants stated that “AT A POINT IN TIME, WE WERE INFORMED THAT WATERVILLE HOLDINGS (BVI) LIMITED COULD NOT OBTAIN THE FINANCE FOR THE PROJECTS. THEREAFTER, A SERIES OF MEETINGS WAS HELD BY THE CABINET SUB-COMMITTEE FOR THE PROJECT AND OUR COMPANY, BUILDING INDUSTRY CONSULTANTS LIMITED. OUR COMPANY WAS TASKED BY GOVERNMENT TO VALUE ANY WORK DONE BY WATERVILLE HOLDINGS (BVI) LIMITED BEFORE THE DETERMINATION OR TERMINATION OF THEIR CONTRACT…”.

The Valuation, according to BIC, was prepared and a certificate issued or certified on 23rd August, 2006 by them (BIC), and presented to the Government/Cabinet Sub-Committee.

Please stay tuned for the details of the Consultants’ Valuation of the amount of Waterville claims in connection with the rehabilitation of Ohene Djan, El-Wak and Baba Yara Stadia and what transpired next.