A former Chief Executive Officer (CEO) of the Venture Capital Trust Fund (VCTF), Mr Daniel Duku, who is standing trial, together with five others for causing financial loss of GHS42.8 million to the state, has agreed to refund GHS42 million.

When the case, Republic v. Daniel Duku and five others was called on Friday, 5 June 2020 at the Land Division of the Accra High Court, the Director of Public Prosecution, Mrs Yvonne Atakora Obuobisa told the hearing presided over by Justice Anthony Oppong that three of the six accused persons, have negotiated with the state and opted to pay restitution and compensation per Section 35 of the Court Act.

Apart from Mr Duku, who is the first accused person, the other two who have made that decision include third accused person Irene Anti Mensah and fifth accused person Frank Aboagye.

The court directed the DPP to file an Executed Agreement spelling out the terms of the deal to avert any future confusion.

The remaining three accused persons, Richard Larssy Agbenyefia, Mr Kofi Sarpong and Charity Opoku, have not made any such decision yet.

The case has been adjourned to Monday, 8 June 2020.

Background

While Mr Richard Lassey Agbenyefia is a former Member of Parliament for Keta and a former member of the Board of Trustees of VCTF, Irene Anti-Mensah doubled as the Executive Assistant to the former CEO, Mr Duku. She was also an Investment Officer of VCTF.

Mr Kofi Sarpong was also an Investment Officer of VCTF while Frank Aboagye Mensah, a businessman and husband Irene. The sixth person, Charity Opoku, who is also known as Charity Ameyaw, was an accountant with 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 charge sheet was signed by the DPP on behalf of the Attorney General and Minister of Justice, Ms Gloria Afua Akuffo.

Facts

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

Upon assumption of office, Mr 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, Mr Duku allegedly managed to obtain the approval of the Board for the establishment of the DAF scheme.

According to the prosecution, Mr Duku, by approval of the Board, could only approve loans not exceeding GHS30,000.

Any loan amount above GHS30,000 was subject to Board approval. The Board also approved strict guidelines under which the loans were to be disbursed.

An amount of GHS1,000,000, which was later increased to GHS2,000,000 was approved by the Board as a revolving fund for the DAF project.

According to the prosecution, investigations have revealed that Mr Duku disbursed various sums of money under the scheme, the total of which far exceeded the approved amount of GHS2,000,000.

Prior to the appointment of Mr 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 GHS50,000 and GHS500,000 as the maximum amount that could be disbursed at a time to the Venture Capital Finance Companies.

This programme ran successfully until Mr 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. The 1st accused could, however, only approve loans up to GHS50,000. Any loan amount above the GHS50,000 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 totalling GHS4,240,000 which resulted in a total loss of GHS12,601,796.25 being principal and accrued interest to the Fund.

The Board, upon realising 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 GHS1,500,000 to GHS2,000,000.

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 authorised 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 chest and dishonestly appropriated the entire amount. The Board on realising 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 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.

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.

According to the prosecution, evidence will show that these and other acts of the accused persons have resulted in the loss of over GHS42,856,470.21 to the Republic.