Court directs public officials who misappropriated state funds to repay by international best practices
An Accra High Court has directed the Director of Public Prosecutions (DPP) to draft International best practice agreement of payment terms for Daniel Duku, a former Chief Executive Officer of the Venture Capital Trust Fund (VCTF) and two others who have pleaded guilty for allegedly causing financial loss of GH¢42.8 million to the state.
Duku appointed during the tenure of the National Democratic Congress in 2010, and his Executive Assistant, Irene Anti-Mensah, Frank Aboogye Mensah, the husband of Irene had indicated their willingness to refund GH¢15 million as restitution to the state.
The other accused are Richard Lassey Agbenyefia, a former National Democratic Congress Member of Parliament for Keta and a former member of the Board of Trustees of VCTF; Kofi Sarpong, an Investment Officer of VCTF and Charity Opoku also known as Charity Ameyaw, an accountant at VCTF.
They have been variously charged with 86 counts of willfully causing financial loss to the state, abetment of crime, stealing, defrauding by false pretences and issuing of false cheques.
The Court presided over by Mr Justice Anthony Oppong however directed the state to use a Kenyan example of plea bargaining in drafting their terms of agreement for payment.
According to the court, the state should also explain to the accused for them to could understand the consequences of their plea and also their right to appeal after pleading guilty.
The court held that it wanted to ensure that the right thing was done and also the accused must pay more than GH¢42.8 million that the state contended they have misappropriated.
“It would be good to adopt best practices like the Kenyan example. The accused persons must understand why they are pleading guilty. I have look at what you have filed and it looks like you need some guidance,” the trial judge said.
The court was of the view that in the case of Duku who has two properties, it would be proper for the state to value those two properties and same sold to offset his debt.
According to the court when it took pains to do personal assessment of the property it obtained about GH¢40 million but the state had mentioned GH¢42.8 million as what was lost in the charge sheet.
However, Mrs Yvonne Atakora Obuobisa, the DPP said the state’s agreement was based on Section 35 of the Court’s Act.
The DPP drew the court’s attention to the fact that Kenya’s example was about Plea Bargaining Agreement and Ghana was yet to develop that.
“If it was about Plea Bargaining agreement, Ghana did not have that but we have to go by Section 35 of the Court’s Act.
She cited various cases that the state had gone under Section 35 and have succeeded in retrieving state funds saying “It’s the money that we are interested in here.”
Mr Addo Attuah, Duku’s counsel said it was mutually agreed on that his client’s property were auctioned to pay the amount involved bearing in mind Section 35.
Last week, Duku, who is standing trial with five others for allegedly causing financial loss of GHC42.8 million to the state has decided to refund GHC15 million as restitution to the state.
Two other accused Irene and Frank Aboagye Mensah, a couple have entered into an agreement with the Attorney -General (A-G) to pay to the state in line with Section 35 of the Courts Act, 1993 (Act 459).
The DPP on June 5, this year, informed the Court that the three accused have reached an agreement with the A-G, and therefore the state would like the court to adopt the agreement and convict the accused as guilty.
The presiding judge, however, said the agreement for restitution had not been fully executed by the accused and the A-G, since both parties have not signed it.
He, therefore, directed the two sides to fully execute the agreement and file it at the court for it to determine it per Section 35 of Act 459.
Under Section 35 (1) of Act 459, a person accused of an offence which had caused “economic loss, harm or damage to the state or state agency may inform the prosecutor whether the accused admits and is willing to offer compensation or make restitution and reparation for the loss, harm or damage caused.
Additionally, the Act explains further that when an accused makes an offer of restitution, the prosecutor shall consider whether the offer is acceptable or not and inform the court.
In the event the offer is not acceptable to the prosecution, the trial shall continue, but if the offer is acceptable, the accused will plead guilty and the court will convict him on his own plea.
When passing sentence, the court will then order the accused to pay the restitution based on conditions set by the court.
However, per Section 35 (7) of Act 459, if the accused person fails to fulfill the conditions set by the court for the payment of the restitution, the court shall pass a custodial sentence on him.
Duku, is alleged to have facilitated the recruitment of Irene and Sarpong, who were his work colleagues at the Ghana Investment Promotion Centre (GIPC).
That 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, through approval of the Board, could only approve loans not exceeding GH¢30,000.
Any loan amount above GH¢30,000 was subject to the Board’s approval. The Board also set out strict guidelines under which the loans were to be disbursed.
An amount of GH¢1million, which was later increased to GH¢2 million was approved by the Board as a revolving fund for the DAF project.
According to the prosecution, investigations revealed that the Duku disbursed various sums of money under the scheme, the total of which far exceeded the approved amount of GH¢2 million.
Prior to the appointment of Duku as Chief Executive Officer 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 Duku (albeit with Board approval) this time to be controlled directly from the office of Duku.
Duku however, could only approve loans up to GH¢50,000 and that 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, Duku persistently approved loans purportedly under DAF and SPV well above his threshold directly to a number of companies some of which were non-existent whilst some of these fictitious companies bore addresses which belonged to him.
Thus the all the accused 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 these companies.
For instance, Charity Opoku, the sixth accused, who was at all material times the accountant at VCTF and a signatory to the VCTF account, aided Duku by signing blank cheques to grant loans to some of these companies while even on annual leave.
Some of the cheques were issued even before the purported applications for the loans were received. Duku 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 and its sustainability, instructed Duku in 2013 to stop the disbursement of loans under the DAF scheme and to rather concentrate on recoveries.
However, Duku misled the Board by reporting that he had recovered 81 per cent of the outstanding loans under DAF when he knew it to be false and consequently obtained the Board’s approval to resume disbursements under the DAF scheme.
At the request of Duku, the Board relying on the false report of Duku, increased the DAF Fund from GH¢1.5 million to GH¢2 million.
Again, in January 2015, the Board instructed Duku to completely stop the disbursement of loans and focus on the recovery of loans already disbursed. These instructions were ignored by Duku who rather authorized the disbursement of more loans without the knowledge or authority of the Board.
In June 2015, even though the appointment of Duku had been terminated, he remained in office until September 2015 during which period he disbursed more loans to companies some of which belonged to his official driver and some cronies.
During the period, Duku obtained an amount of $26,063 to attend an official programme in the United States of America.
Even though Duku did not attend the programme he failed to pay back the money into chest and dishonestly appropriated the entire amount.
The Board on realizing that Duku did not attend the programme, directed him to refund the $26,063 to VCTF, to which in response, Duku issued false cheques to VCTF, which were dishonoured upon presentation at the bank.
The second accused Agbeyenfia too 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.
Thus Irene and Sarpong, 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 Frank, husband of Irene used non-existent companies to obtain loans from VCTF and acted together with Duku, Irene and Sarpong to dishonestly appropriate various sums of money from VCTF in the names of these companies.