‘I paid Springfield US$4m based on legal advice’ – Ex-BOST MD
The immediate-past Managing Director of the Bulk Oil Storage and Transportation Company Limited (BOST), Mr. Alfred Obeng Boateng, has said under his watch, Springfield Energy, one of BOST’s clients, was given US$4 million as part-payment of a US$9 million interest on a principal judgment debt of US$11,104,143.2 awarded them by a court for the lost on an oil consignment which Springfield took to BOST for storage in 2013.
Mr Obeng, who was sacked by President Nana Akufo-Addo a couple of months ago, along with other CEOs of state-owned institutions, told Accra100.5FM’s Ghana Yensom programme on Wednesday, 19 October 2018, that he made the payment based on legal advice from the Head of Legal Affairs at BOST.
External lawyers of BOST, subsequently advised the company against paying the remaining $5 million, since, in their view, Springfield did not deserve it.
Despite that legal advice, BOST, under the leadership of current MD, George Mensah Okley, went ahead to make a second part-payment in the sum of US$3 million, over which Minority MP for Bongo, Edward Bawa, has filed a petition at the Commission for Human Rights and Administrative Justice (CHRAJ), to interdict and probe Mr Okley and the Head of Finance.
Defending the first part-payment, Mr Obeng Boateng told Ghana Yensom sit-in host Katakyie Obeng Mensah in an exclusive interview that: “I am a man of principle, and I worked in the interest of BOST to make profit for the company”.
According to him, “The workers there know that I wouldn’t do anything illegal”, adding: “I can show you the legal advice I got from the Head of Legal Affairs before making the payment”.
“That alone”, he said, “is enough to exonerate me from any wrongdoing”.
“I paid US$4 million, yes, but before paying, the Head of Legal Affairs gave an opinion and I made the payment based on that legal opinion. I followed corporate governance, I have studied law, I have a legal practice certificate and, so, I understand corporate governance”.
Read the full background as presented by Bongo MP Edward Bawa:
• Springfield Energy brought its product to BOST tank farm in October 2013 for storage.
Part of the product could not be accounted for. Springfield Energy took advantage of this loss and made a claim of $20,226,717.75, which was far more than the actual quantity lost. This was at a time when Mr. John Kojo Ankoful, now the Head of Finance, was the Acting M.D. of BOST.
• Therefore, on the 18 November 2015, Springfield Energy filed a writ against BOST at an Accra High Court, claiming the following:
I. Recovery of $20, 226,717.75 for their lost products
II. At the interest rate of 19% from October 2015 till the final payment of the principal;
III. Loss of profit of $3,420,000.00
• When Mr. Awuah Darko assumed office as the M.D. of BOST, and having studied the documents on this case, challenged all the claims of Springfield and hence engaged Ernst and Young Audit Firm to audit the transaction to ascertain the actual quantity of products lost. Ernst and Young found out that the actual quantity of product lost was worth $11,104,143.2.
Both BOST and Springfield agreed and accepted this finding.
• A summary judgement was awarded to Springfield for its claim by the Accra High Court.
At this point, Mr. Awuah Darko engaged external lawyers to fight the case.
BOST filed a stay of execution at the court to enable them appeal against the judgement.
The High Court granted it partially and ordered the payment of the cost of actual product lost as ascertained by the auditors and agreed by both parties.
This was $11,104,143.29. On the 20th December 2016, BOST, under Awuah Darko, paid the said principal amount of $11,104,143.29 through a Five-Year Term loan from Fidelity Bank.
The remaining unresolved issue of the 19% interest rate being claimed by Springfield on the principal is still pending at the High Court and Court of Appeal.
• Springfield in September 2017, under Mr. Alfred Obeng’s tenure as M.D., approached BOST to have the matter settled out of court.
The Head of Finance, Mr. John Kojo Ankoful (under whose tenure as acting M.D. when this product loss was occasioned), and the Head of Legal Department, Mrs Harriet Amoah negotiated the settlement agreement of $9 million with Springfield.
This was supposed to be the interest on the principal ($11,104,143.29). Alfred Obeng ordered the payment of $4 million as part of the $9 million interest payment before the settlement agreement was even signed. This was on the 27th September 2017.
It is important to note that this was without the presence or advice of the external lawyers who were handling the case in court.
• The Head of Legal Department, Mrs Harriet Amoah then sent the Settlement agreement to the external lawyers for their perusal and in a response via email, the external lawyers clearly advised against further payment to Springfield because Springfield, in the opinion of the lawyers, was not entitled to an amount of $9 million as interest payment.
For the purposes of clarity, the following were the exact words of the lawyers: “We have not revised our view that Springfield Energy is smartly trying to blow hot and cold at the same time.
“We, therefore, stand by our professional advice given earlier that BOST should not cave in to the blackmail of Springfield to hand them underserved millions of dollars from the public purse.
“The modus operandi of Springfield is not new. It has been so since the inception of this case. Let Springfield boldly go to the court, prove their case in accordance with the law and let the court deliver its judgement.
“BOST will then have the option of satisfying the judgement, or if it is unhappy, challenge the judgement higher up.
“That way, it would be seen that BOST stood its grounds and fought a good battle to protect the public purse. That way, nobody can accuse all those involved in the case of creating, looting and sharing. This is our position on the matter”.
• As a result of this advice, the settlement agreement was not executed – both parties did not sign and, therefore, no one can refer to any duly executed settlement agreement. BOST made it clear to Springfield that they cannot claim interest on their products and at the same time, loss of profit on the same product. In the opinion of BOST, the two are the same.