3 NDC APPOINTEES CONVICTED FOR CAUSING FINANCIAL LOSS TO THE STATE.

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3 NDC APPOINTEES CONVICTED FOR CAUSING FINANCIAL LOSS TO THE STATE.

The Accra High Court has convicted a former Chief Executive Officer (CEO) of the Venture Capital Trust Fund (VCTF), Daniel Duku and two others for causing financial loss to the state.

As their punishment, Duku, his Executive Assistant, Irene Anti Mensah and her husband, Frank Aboagye Mensah, would pay restitution of about GH₵18.5m to the state.

The court presided over by Justice Anthony Oppong, ordered the three convicts to pay the restitution following an agreement they had with the Attorney-General (A-G) per Section 35 of the Courts Act, 1993 (Act 459)

In line with Section 35 of Act 459, the three convicts pleaded guilty to a total of about 42 charges levelled against them by the State.

The court had earlier rejected the restitution agreement and ordered the trial to commence.

However, the three accused persons filed a review of that decision and at today’s hearing, the court agreed to the restitution agreement.

Per the agreement as enforced by the court, Duku must pay GH₵15million and $26,063 to the state.

The court has also imposed a fine of GH₵500,000 on Duku, while all the assets he acquired during his tenure as CEO of Venture Capital Trust (2010-2015) have been confiscated.

With regard to Irene Anti Mensah, the court ordered her to pay GH₵1.5million and also imposed a fine of GH₵100,000 on her.

The court ordered Frank Aboagye Mensah to pay GH₵1,195,000 and also imposed a fine of GH₵100,000 on him.

All the convicts have been ordered to pay a percentage of the amount within 7 days and the remaining within three months after their conviction.

Per Section 35 of Act 459, if the convicts refuse to pay the restitution within the stipulated period, the court will impose a custodial sentence on them.

Financial loss

In April, last year, the Attorney-General, charged Duku and five others for causing financial loss of about GH¢42.8 million to the state.

The other accused persons are Richard Lassey Agbenyefia, a former Member of Parliament and a former member of the Board of Trustees of VCTF (the Board) and and Charity Opoku also known as Charity Ameyaw.

The fact that three of the accused persons have pleaded guilty and have agreed to pay restitution under Section 35 of Act 459, means Agbenyefia and Charity Opoku will be the only ones to stand trial.

Facts

According to the facts of the case, Duku facilitated the recruitment of Irene and Sarpong, who were his work colleagues at the Ghana Investment Promotion Authority (GIPA).

Upon assumption of office, Duku introduced a loan scheme named Development Assistance Fund (DAF) to provide credit directly to individuals and companies in clear contravention of the VCTF Act and contrary to the objects of VCTF.

Despite the advice of solicitors of VCTF on the illegality of the proposed loan scheme, Duku allegedly managed to obtain the approval of the Board for the establishment of the DAF scheme.

According to the prosecution, Duku, by approval of the Board, could only approve loans not exceeding GH¢30,000.

Any loan amount above GH¢30,000 was subject to Board approval. The Board also approved strict guidelines under which the loans were to be disbursed.

An amount of GH₵1,000,000, which was later increased to GH₵2,000,000 was approved by the Board as a revolving fund for the DAF project.

According to the prosecution, investigations have revealed that the Duku disbursed various sums of money under the scheme, the total of which far exceeded the approved amount of GH₵2,000,000.

Prior to the appointment of Duku as CEO and the establishment of DAF, VCTF operated an existing scheme which gave loans to farmers in the Northern and Brong Ahafo Regions for the cultivation of sorghum.

This loan scheme known as the Special Purpose Vehicle (SPV) gave loans to certain Venture Capital Finance Companies (VCFC) namely SINAPI ABA and Techno Serve Company Limited for onward lending to farmers.

The SPV had a minimum of GH₵50,000 and GH₵500,000 as the maximum amount that could be disbursed at a time to the Venture Capital Finance Companies.

This programme ran successfully until the Duku assumed leadership in June 2010 when the project stopped.

However in or about October 2010, the SPV was reintroduced at the instance of the 1st accused (albeit with Board approval) this time to be controlled directly from the office of the 1st accused. 1st accused could however only approve loans up to GH₵50,000. Any loan amount above the GH₵50,000 threshold required Board approval.

Contrary to and in flagrant disregard of the approved Board thresholds for the CEO, the 1st accused person persistently approved loans purportedly under DAF and SPV well above his threshold directly to a number of companies some of which were non-existent. Some of these fictitious companies bore addresses, which belonged to the 1st accused.

The accused persons used the names of a number of companies belonging to other persons to obtain loans without the knowledge, permission and or consent of the owners of the companies.

The 6th accused, who was at all material times the accountant at VCTF and a signatory to the VCTF account, aided the 1st accused by signing blank cheques to grant loans to some of these companies while on leave. Some of the cheques were issued even before the purported applications for the loans were received. The 1st accused, using these blank cheques signed by the 6th accused, granted loans totaling GH¢4,240,000 which resulted in a total loss of GH¢12,601,796.25 being principal and accrued interest to the Fund.

The Board, upon realizing the financial challenges facing the Fund in its sustainability, instructed the 1st accused in 2013 to stop the disbursement of loans under the DAF scheme and to rather concentrate on recoveries.

However, the 1st accused misled the Board by reporting that he had recovered 81% of the outstanding loans under DAF when he knew that to be false and consequently obtained the Board’s approval to resume disbursements under the DAF scheme. At the request of the 1st accused, the Board, relying on the false report of the 1st accused person, increased the DAF Fund from GH¢1,500,000 to GH¢2,000,000.

Again, in January 2015, the Board instructed the 1st accused to completely stop the disbursement of loans and focus on the recovery of loans already disbursed. These instructions were ignored by the 1st accused who authorized the disbursement of more loans without the knowledge or authority of the Board.

In June 2015, even though the appointment of the 1st accused had been terminated, he remained in office until September 2015 during which period he disbursed some more loans to companies some of which belonged to his official driver and some cronies.

During the period, the 1st accused obtained an amount of twenty-six thousand and Sixty-Three dollars ($26,063) to attend an official programme in the United States of America. Even though the 1st accused did not attend the programme he failed to pay the money to the chest and dishonestly appropriated the entire amount.

The Board on realizing that the 1st accused did not attend the programme, directed him to refund the twenty-six thousand and sixty-three dollars ($26,063) to VCTF in response to which directive the 1st accused issued false cheques to VCTF, which were dishonoured upon presentation at the bank.

The 2nd accused person also obtained loans in the names of companies based on false representations to VCTF without the knowledge, permission or approval of the owners of the companies whereas in other instances the loans were obtained in the names of non-existent companies.

The 3rd and 4th accused persons, who were responsible for evaluation and processing of loan applications to VCTF, failed to conduct the requisite due diligence on loan applicants but rather facilitated the grant of loans through falsified records by entering false information on the loan application forms.

It has been established that the 5th accused person used non-existent companies to obtain loans from VCTF and acted together with 1st, 3rd and 4th accused persons to dishonestly appropriate various sums of money from VCTF in the names of these companies.

Evidence will show that these and other acts of the accused persons have resulted in the loss of over GH¢42,856,470.21 to the Republic.

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