€2.37m Payment For Ambulance Was In Error – Terkper  October 23, 20236 min read

Former Minister of Finance, Seth Terkper, has admitted that payment for the defective ambulances for which his then deputy, Dr. Cassiel Ato Forson is standing trial, was made in error.

Apart from this admission, Mr. Terkper was not able to point to any document specifically authored by him authorising Dr. Forson to write to the Controller and Account General’s Department (CAGD) requesting the establishment of the letters of credit (LC) which was the means of payment for the ambulances.

He also admitted that the Bank of Ghana (BoG) should not have proceeded to establish the letters of credit for payment for the ambulances until the loan agreement specified in the contract had been signed.

Mr. Terkper also admitted while under cross-examination by the Attorney General Godfred Yeboah Dame, that no contract had been signed per the agreement for the delivery of the ambulances before Dr. Forson wrote the letter requesting the establishment of the letters of credit.

He, however, indicated that he was under obligation from the then Attorney General and his legal department to proceed with the establishment of the LC which were made conditional.

“Are you saying that the BoG should not have proceeded to establish the LC until the loan agreement had been signed?” Mr. Dame asked.

“Yes, that is what the contract specifies and therefore it is the responsibility of the Ministry of Health to ensure that this provision relating to signing the contract had been made before payment were made,” Mr. Terkper responded.

“It is your case that the payment for the ambulances was made in error?” Mr. Dame further asked.

“Yes, but nothing that major conditions in the contract had been breached and attention had been drawn to it by the Attorney General,” Mr. Terkper said.

Mr. Dame also asked whether the former Finance Minister was aware whether any contract for 50 ambulances per the contract agreement were signed before the LC were authorised to be established by the Ministry of Finance.

“It is not my recollection that this was done but I had confidence in the AG and in my own staff who requested that we should establish the LC to avoid default,” Mr. Terkper answered.

Trial

Dr. Ato Forson, Sylvester Anemana, a former Chief Director at the Ministry of Health, as well as private businessman, Richard Jakpa, are standing trial for willfully causing financial loss of €2.37 million to the state, through a contract to purchase 200 ambulances for the Ministry of Health, among other charges.

The main issue raised during the prosecution’s case was whether the defective vehicles were purchased in accordance with the purchase agreement approved by Parliament.

Evidence

Mr. Terkper, in his evidence before the court last Thursday, indicated that he authorised Dr. Forson to write to the Bank of Ghana authorising the establishment of the letters of credit.

“The letter to the Bank of Ghana requesting the setting up of the LC emanated from the Ministry of Finance and had my full authorisation,” he told the court.

He said his authorisation was based on an advice from the Office of the Attorney General asking the Ministry of Finance to honour the contract to avoid government incurring financial liabilities.

Cross-Examination

Mr. Dame, in his cross-examination, put it to Mr. Terkper that he did not indicate to the Economic and Organised Crime Office (EOCO) that he gave approval for payment for the ambulances when he was invited as part of investigations.

The former minister, in response, said he could have not done so because he had left office and therefore could not rely on his memory to make statement which was of legal consequences.

“In your statement which is exhibit 5 for A1 (Dr. Forson) you did not mention anything about authorisation for the payment in question,” the AG asked.

“I did not because I did not have the information,” Mr. Terkper answered.

Asked whether he had since 2018 seen any document by which he authorised the establishment of the letters of credit, Mr. Terkper indicated that he had seen the document by which he requested the establishment of the LC.

Mr. Dame then asked him to look at the exhibit file and show the court the exhibit he was referring to.

The former minister, after going through the file, indicated that the request was based on the Attorney General’s advice cautioning the Ministry of Finance against financial loss to the state and also an opinion of the legal department of the ministry which was based on his referral for a second opinion after the then Attorney General’s advice.

When his attention was drawn to the fact that none of the documents he referred to had his signature, Mr. Terkper said he did not have his signature on them because they were addressed to him.

“Please point out from this list of documents relied on by the Legal Department, which letter you personally prepared or authored,” Mr. Dame queried.

“I cannot but it is important to note that at the time these documents were prepared for my office, there was no reason for me to have written a letter or to have authorised for a letter to be written,” Mr. Terkper answered.

“I am suggesting to you that your claim that there is record for the approval you allege that you gave for the establishment of the letter of credit is false, and that is why there is no record you can point to,” the Attorney General pushed.

Mr. Terkper, in response said, “I disagree because the documents before the court now constituted the input for the letter that was written to the CAGD for the establishment of the LC.”

The former minister was also asked to take a look at the then AG’s advice which he said they relied and point to the part where the AG authorised the Ministry of Finance to authorise the establishment of letters of credit.

“I do not see but it is important to note that AG was requesting that we comply with the suppliers agreement which agreement contained the terms for the establishment of letters of credit,” he said.

Mr. Dame also pointed out that Dr. Forson authorised payment for the ambulances from the budget of the Ministry of Health contrary to the means of payment that had been approved by Parliament which was a Stanbic Bank facility.

“It may look contrary on the face but it is important to understand that the principle that all loans including the LC are ultimately charged to the capital budget of the ministry.

When reminded by the AG that this principle only applies when the loan has been disbursed by the bank, which is not the case with the ambulance payment, Mr. Terkper said the Stanbic loan had lapsed and the Ministry of Finance attempted to reactivate it, but it was not possible.