14th July 2024

Details are emerging on the involvement of some key functionaries of the previous Mahama-led NDC government in the alleged ‘fraud’ at the Electricity Company of Ghana (ECG), involving the procurement of prepayment meters and conductors amounting to some GHS59, 161,964.56 between 2014 and 2016.

According to the 2020 Auditor-General’s report, the former ECG management spent some GHS70, 742,977.77 on the purchase and loaning out of electrical materials in 2014.

The amount involved the GHS59, 161,964.56 spent on the purchase of the prepayment meters and GHS11, 581,019.21 spent on some electrical materials given out on loan to eight beneficiary companies around the same period without any specific terms of agreement.

Detailed account

According to the Institute of Energy Policy, its investigations revealed that, in 2016, the Ministry of Power, through the Ministry of Finance, made a payment of $36 million to L & R Investment and Trading Company Limited for the supply of single phase and three phase electric meters to ECG.

The total contract price was $39,999,566.44, and the materials were to be supplied over a period of 26 weeks. When the contract was signed, an ‘advance’ payment of $ 12 million was paid to L & R Investments, plus a Letter of Credit (LC) of $24 million.

That followed a letter the then Ministry of Power, under Seth Tekper as Acting Minister, wrote to the Managing Director of ECG, in September 2016, informing him of a $80 million financing secured by the government for the procurement of electric meters.

The letter stated that local Ghanaian companies would be given $40 million and Messrs. L & R Investments and Trading Company, whose local representatives were Messrs. First Grace Limited, a company linked to then Deputy Minister of Finance, Cassiel Ato Forson, would be given $40 million.

The ministry’s letter instructed the Managing Director of ECG to initiate discussion with the said suppliers with the view to entering into contract for the supply of the electric meters. The ministry also asked for immediate response to the letter to facilitate cabinet and parliamentary approval.

ECG swindled

The two key conditions before the supply of the meters were a pilot study to assess the meters for two months and the Factory Acceptance Tests (FAT). After the contract was signed and L & R given an initial payment of $12 million, the meters that were to be provided as samples (200 electric meters) for the pilot studies were not sent to ECG. Also, the agreed travel of three representative from ECG to undertake the Factory Acceptance Tests in China before the manufacturing of the said meters did not take place.

Without any of these conditions being met, the management of ECG was sent shipping documents for containers of meters at Tema Port. ECG informed L & R Investment that it could not accept the containers because they had not followed the process agreed to, as per their contract. After months of back and forth with L & R Investments, the containers were cleared from the Tema port to stop the accrual of demurrage. The meters were not the specification, as per the supply contract.

During INSTEPR’s investigation, it came out that the contract was terminated in 2017 after legal consultations on the non-performance by L & R Investment. The company, after months of not conforming to the agreed conditions of the contract, went ahead to discount the $24 million Letter of Credit (LC) given under the contract.

On August 16, 2017, at a time Capital Bank Limited had ceased to be a bank under the laws of Bank of Ghana, it discounted the LC and made a payment of $22.5 million to L & R Investment.

When the Institute contacted officials of ECG, it was informed that all documents relating to the transaction were with the Economic and Organised Crime Office (EOCO) and National Security, which had been investigating the transaction since 2017.

EOCO complicit?

Meanwhile, another letter sighted by the Daily Statesman shows how a UK-based consultancy firm, Kroll and Associates, which was contracted to undertake investigations on behalf of the government, expressed disappointment in the work of EOCO on the transaction.

The letter, written by the Managing Director of Kroll, Benedict Hamilton, questioned why the EOCO report made no reference to Cassiel Ato Forson and his role in the alleged fraud, “his misleading of Parliament and his connections to First Grace Limited and Timios Company Limited, First Grace’s sister company”.

It also asked why there was no mention of one Adu-Yeboah’s links to the NDC or his role in Mahama’s 2016 election campaign and the failure of the report to mention the ties between Adu-Yeboah’s company, First Grace, and Timios.

It further wondered why there was no mention of the circumstances of Capital Bank’s “appointment as the managing institution for the $40m received from the Eurobond Account; no mention of L&R’s role in the establishment of the Letter of Credit, such as L&R’s Kojo Sho’s delivery and approval of the terms of the Letter of Credit and details of transactions made in relation to the Letter of Credit”.

It further questioned why “there was no mention of Seth Terkper’s role as both Minister of Finance and Supervising Minister of Power and his involvement in diverting the financing of the contract from CAL Bank, which had received parliamentary approval, to the Eurobonds Proceeds Account among other relevant questions.”


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