A former Minister for Finance under the erstwhile Mahama regime, Seth Emmanuel Terkper, has testified before an Accra High Court that the decision to establish Letters of Credit (LC) for the purchase of some 200 ambulances was to avoid compounding a problem.
Mr. Terkper told the court, presided over by Her Lordship Justice Afia Serwah Asare-Botwe, that the decision was taken based upon advice of the Attorney-General and Legal Unit of the Ministry of Finance.
Although he said the establishment of the LCs was in error against a loan agreement approved by Parliament between the Government of Ghana and Stanbic Bank, the Ministry, under his watch, would have compounded on the problem if they had not used their discretion on the matter.
He explained that the loan agreement was secured somewhere in 2012, a time he (Ato Forson) was a Deputy Minister of Finance, but was faced with the circumstance of the contract between Government of Ghana and Big Sea, supplier of the ambulances in 2014/15.
Mr. Terkper was testifying as third defence witness (DW3) for his then Deputy Minister of Finance, in-charge of Budget, Cassiel Ato Baah Forson, who is standing trial for causing financial loss to the State in the purchase of faulty ambulances to the tune of €2.3 million.
Dr. Forson, the current Minority Leader in Parliament and Ajumako-Enyan-Essiam Legislator, has pleaded not guilty to the charge. Â He is standing trial together with two others as the first accused (A1).
The former Finance Minister, under cross-examination by the Attorney-General and Minister for Justice, Godfred Yeboah Dame, stated that the decision to give his Deputy the green light for the authorisation of the LCs was as they had been advised that the country was in breach of the contract with Big Sea, hence had to act fast.
According to Mr. Terkper, complied with the A-G’s advice by establishing the LCs, as the then government legal advisor said it would be difficult for their officer to mount a defence if they failed to act.
The loan agreement, which had been  approved by Parliament was discovered by the Debt Management Unit of the Ministry of Finance to be invalid, but  they were disadvantaged to secure a new loan facility.
Mr. Dame, however argued that the government was bound by the terms of the agreement, and inquired whether it was the former Minister’s case that the Ministry of Finance chose not to comply with the term of the agreement.
The witness answered in the negative, stating that throughout  his term in office, he took A-G’s advice seriously and acted on it.
Mr. Dame also indicated to the witness that in his statement to the Economic and Organised Crime Office (EOCO), he stated that payment for the ambulance was held in ambiance, due to a technical report from the Ministry of Health. The said report indicated that there were some  defects.
He (Dame) therefore wanted to know whether it was the witness’ evidence that the Ministry of Health proceeded to authorise payments after observing the defects on the ambulances.
The witness responded in negative and added that the defects he was referring to was in relation to the second payment, which was in ambiance because of a court injunction.
The witness also explained to the court that LCs was not tantamount to payment, but a guarantee.
The other accused persons are Richard Jakpa, a private businessman and local representative of Big Sea General Trading Limited, a Dubai-based company, and Sylvester Anemana, former Chief Director at the Ministry of Health.
Terkper’s Evidence In-Chief
Meanwhile the following is the full evidence in chief given to the court by Mr Terker. The matters stated herein are within my personal knowledge, information and/or belief. Where they relate to the specific facts of the instant case they are matters based on information I have received from counsel, A1 and/or documents I have reviewed.
I say that I was the Finance Minister of the Republic of Ghana for the period 2013 to 2016. In that role, I was responsible for supervising and monitoring the finances of Ghana; advising Government of the total resources to be allocated to the public sector; and approving withdrawals from the Consolidated Fund of moneys allocated by Parliament.
I was also responsible for the management and control of the Consolidated Fund and other public funds and, generally, for matters relating to the financial affairs of Government.
In the performance of my functions as Minister of Finance, it was part of my responsibilities to anticipate and/or avert exposures and financial liabilities for Government. In this regard, no withdrawals could be made from the accounts or funds of any Ministry, Department of Agency of the Republic of Ghana without my approval.
Additionally, I had the responsibility for taking pro-active measures as necessary to avert or minimize government exposures and liabilities towards the overall objective of supervising and monitoring the finances of the country.
I know A1, Honourable Dr. Cassiel Ato Forson, as a Deputy Minister of Finance from 2013 to 2016. As my Deputy, his primary duty was to assist me in the execution of my duties, functions and mandate as the Minister of Finance. He was competent and professional in his work.
I understand that At has been charged with the criminal offences of willfully causing financial loss to the Republic and intentionally misapplying public property. I am further informed that the charges relate to the period between 2013 and 2016 when A1 served as my Deputy at the Ministry of Finance. It is also my understanding that the Particulars of Offence on willfully causing financial loss to the Republic state that:
“Cassiel Ato Forson between August 2014 and April 2016, in Accra in the Greater Accra Region of the Republic of Ghana willfully caused financial loss of €2,370,000.00 to the Republic by authorizing irrevocable letters of credit valued at €3,950,000.00 to be established out of which payments amounting to €2,370,000.00 were made to Big Sea General Trading Ltd (sic) for the supply of vehicles purporting to be ambulances without due cause and authorization”.
It is also my information that the Particulars of Offence on intentionally misapplying public property provide that:
“Cassiel Ato Forson between August 2014 and April 2016, in Accra in the Greater Accra Region of the Republic of Ghana intentionally misapplied the sum of €2,370,000.00 being public property by causing irrevocable letters of credit be established against the budget of the Ministry of Health in favour of Big Sea General Trading Ltd (sic) for the supply of vehicles purporting to be ambulances without due cause and authorization”.
I was invited by the police during their investigations into this matter. At no point during my interactions with the police officers in charge of the investigations of this case did any of them ask me whether At acted with or without my authorization regarding the request by the Ministry of Finance ot the Bank of Ghana to set up the letters of credit for the purchase of the ambulances.
1have been shown copies of Exhibits A and B1, which I understand constitute the basis of the case against A1. Exhibits A and B1 are written on the letterhead of the Ministry of Finance and signed by A1 for the Minister of Finance. The letter to the Bank of Ghana requesting the setting up of the LC emanated from the Ministry of Finance and had my full authorization.
In the course of police investigations into the instant matter, I gave a statement to the investigators, which has been tendered in evidence as Exhibit 5 for A1. I rely on the statements I made in Exhibit 5as follows:
“Upon assuming office, requests were made for various payments. Cabinet had placed a moratorium on loans and payment for the 200 ambulances was also held in abeyance due to a technical report from the MOH regarding defects that were described as critical.
Upon receipt of the Attorney-General’s opinion, MOF proceeded to ask BOG to establish the Letter of Credit. The letter noted that there was a valid contract and the terms of the Agreement must be respected.
At this point the loan facility (to MOH) had lapsed and so the LC was established against the MOH Budgetary allocation. This is my brief recollection of events subject to obtaining the documents to enable me elaborate further if required.”
Since I left office as the Minister of Finance on 6th January 2017, I have not had access to documents at the Ministry of Finance relating to the ambulance transaction. Counsel for A1 has however shown me some documents on the ambulance transaction that I understand were disclosed by the Prosecution pursuant to orders of the court. I have been shown Exhibits A, B1, X and AK.
As stated earlier, I authorized A1 to sign Exhibits A and B1. I wish to confirm that I signed Exhibit AK in July 2014 at a time the Ministry of Finance was hopeful it would be able to revive the Stanbic facility to finance the purchase of the ambulances.
In fact, I wish to add that before the Ministry of Finance requested the Bank of Ghana through Exhibit A to set up the letters of credit for the ambulance, the Ministry had received a copy of Exhibit AK from the Office of the Attorney General. I annex and mark as Exhibit ST 1a copy of the advice from the Attorney General.
Upon receipt of Exhibit TS 1, I sought further legal advice from the legal counsel of the Ministry of Finance. Per a memo dated 18th July 2014, the then legal counsel of the Ministry recommended the signing of the loan agreement between the Government of Ghana and Stanbic Bank to enable the setting up of the letters of credit. I annex and mark as Exhibit ST 2 a copy of the said memo.
Exhibit ST 2 reiterated the advice of the Office of the Attorney General in Exhibit AK to the effect that the Ministry of Health should take to execute the contract in order to avoid financial liability to the government.
The was also to emphatic that LC had not been established and “this is a breach of the Agreement”. Thus, it the contractor took Government to court on this breach, as per the AGs’ advice, Government would be seriously challenged to put up a defence”.
Indeed, at the time A1 signed Exhibits A and B1 the Ministry was still optimistic that it could revive the Stanbic facility. However, this did not materialize. At al material times therefore, I acted and authorised actions to be taken in reliance upon legal advice given by institutions of State.
As the Minister responsible for the management and control of the Consolidated Fund and such other public funds and matters relating to the financial affairs of the Government, it would have been imprudent for me, upon receipt of Exhibit X and Exhibit STI 2and, given the Ministry’s inability to revive the Stanbic loan, to have taken no action to avoid potential liability for the Government. The Stanbic loan agreement could not be revived for the purchase of the ambulances and, I as the Minister of Finance, had the duty to take steps per the AGs’ advice, Government would be seriously challenged to put up a defence”.
Indeed, at the time A1 signed Exhibits A and B1 the Ministry was still optimistic that it could revive the Stanbic facility. However, this did not materialize. At al material times therefore, I acted and authorized actions to be taken in reliance upon legal advice given by institutions of State.
As the Minister responsible for the management and control of the Consolidated Fund and such other public funds and matters relating to the financial affairs of the Government, it would have been imprudent for me, upon receipt of Exhibit X and Exhibit STI 2 and, given the Ministry’s inability to revive the Stanbic loan, to have taken no action to avoid potential liability for the Government.
The Stanbic loan agreement could not be revived for the purchase of the ambulances and, I as the Minister of Finance, had the duty to take steps within my mandate in terms of managing and controlling the financial affairs of Government, to avoid financial liability for the Government. Accordingly, I authorized the setting up of the LC against the budget allocation of the Ministry of Health for capital expenditure, since the purchase of the ambulances was a capital expenditure.
I state that issues relating to the performance of the ambulance contract such as whether the ambulances meet the specifications in the ambulance contract, when payment should be made under the LC and under what conditions, among others, rested with the parties to the contract, i.e. the Ministry of Health and the Big Sea General LLC. In this regard, I collaborated fully with the Ministry of Health in conducting the various inspections that they conducted.
Notwithstanding this collaboration and quite apart from providing clearance for the LC to be established for the purchase of the ambulances to avoid financial liability to the Government, it is not the duty of the Ministry of Finance or any of its officers to monitor, track and/or examine the performance of the fine intricacies of every contract entered into by any Ministry (except the Ministry of Finance), Departments or Agency of Government.
For the avoidance of doubt, I state again that ,I as the then Minister of Finance, authorized A1 to request the Bank of Ghana to set up the CL as per Exhibits A and B1 with the sole objective of avoiding potential financial liability for the Government. This, in my view, fell within my mandate of managing and controlling the financial affairs of the Government.
The case is adjourned October 26.
