You are here: HomeBusiness2019 09 26Article 783786

Business News of Thursday, 26 September 2019


Government's takeover of GCDGL illegal – Jospong Group

Executive Chairman of Jospong Group of Companies, Dr. Joseph Siaw Agyepong Executive Chairman of Jospong Group of Companies, Dr. Joseph Siaw Agyepong

The Jospong Group of Companies has described as illegal, unconstitutional and regrettable the action by the State Interests and Governance Authority (SIGA) to assume control of the Great Consolidated Diamonds Ghana Limited (GCDGL)–a subsidiary of the Jospong Group.

In a release copied to the B&FT the Jospong Group maintained that: “The conduct of SIGA amounts to total disregard for rule of law and good governance. As a responsible company, we reiterate the fact that the matter is presently before a court of competent jurisdiction and we will, therefore, wait for the final determination of the matter.”

According to the release, on Thursday 18th of September 2019, “Executives of SIGA assisted by the BNI and military apparatus illegally entered GCDGL premises, took over the security of the mine, closed down all the offices, seized staff vehicles and mobile phones, threatened staff, and closed down the only hospital which serves the community without regard for the patients who were receiving treatment. We wish to state that at all times, due notice was not served on the company.

“Their conduct created pandemonium in the rather peaceful community and deprived the community of the very livelihood the facility had given them over these few years. Consequently, the appointment of the Interim Management Committee by SIGA is void and has no legal basis.”

Management also assured all stakeholders including the chiefs and people of Akwatia and the workers that it is doing everything possible to resolve this matter using the appropriate legal remedies.

The Jospong Group of Companies currently employs over 50,000 people and remains committed to continued contribution to national development through the provision of jobs.

“Since the acquisition of the mine, millions of dollars have been invested into the mine which had been completely run down at the time of acquisition. The development plan to revive the mine to full scale operations, we have undertaken numerous feasibility studies and development activities amounting to over 20 million USD. The GCDGL and its strategic partners have reached an advanced stage to execute a 50 million USD investment to operationalize the mine of which a memorandum of understanding has been signed,” the management of the company noted in the statement.

Reacting to recent media reports on the abrogation of GCDGL, management indicated that the publications were inaccurate and a misrepresentation of the terms of the agreement executed between the parties.

The release further explained that the abrogation of contract by Government led to several attempts to make the mine commercially viable, albeit not yet entirely successful. This led to series of communication with the DIC with the aim of reaching a mutually satisfactory direction on how to proceed with same.

“Despite these attempts, the Government acting through DIC by a letter dated 9th April 2019 purported to abrogate the agreement between the parties without following due process. GCDGL through their lawyers drew the attention of DIC’s lawyers to the illegality of the intended action of the DIC, and proceeded to issue a writ of Summons and an accompanying Statement of Claim to protect the interest of the company. It is therefore unfortunate that Government, after filing a Statement of Defense in the aforementioned suit, proceeded to take over the management of the company without recourse to the law and tenets of good governance.”

On the payment of consideration, it stated GCDGL, has since the acquisition made payments on account, and through its principal shareholder been in dialogue with Government with the aim of settling the outstanding liability by way of a set-off from Government’s liability to the shareholder. Government is yet to respond to this proposal despite repeated overtures.

JGC took ownership of GCDGL from government’s Divestiture Implementation Committee (DIC) in the year 2011. At the time of acquisition, the company had been closed down with its premises in a dilapidated state with obsolete machinery and equipment.

“Upon the assumption of ownership of the mine in 2011, and immediately after the execution of the Agreement between DIC and GCDGL, substantial investments were made in an attempt to revive the mine and make it commercially viable. Subsequently, GCDGL has also focused on meeting the necessary regulatory, engineering and restructuring works necessary to achieve this objective. We wish to state that all due processes, guidelines and regulations provided by DIC to regulate the said transaction were duly followed” the release added.