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High court convicts Daniel Duku, two others in Venture Capital case

An Accra high court has accepted an agreement, under which three accused will pay GHC18.5 million in total to the state 

The high court which rejected an agreement between the Attorney General and three accused in the 22 June 2020 case of the Republic vs Daniel Duku and five others reviewed its decision today (10 July 2020) and accepted the agreement, which would see these three out of the six accused paying roughly GHC18.5 million to the state.

The high court was presided over by Justice Anthony Oppong, a Court of Appeal judge sitting with additional responsibility as a high court judge.

The agreement includes the seizure of 11 properties belonging to the first accused.

The three accused – Daniel Duku (first accused), Irene Anti-Mensah (third accused) and Frank Aboagye Mensah (fifth accused) – entered into negotiations with the Attorney General under Section 35 of the Courts Act 1993 (Act 459). A provision under the act allows accused people to offer compensation and restitution to the state for loss, harm or damage caused the state.

The charges

According to the state’s charge sheet as presented in court, the first accused, Daniel Duku, was charged with offences of wilfully causing financial loss to the republic, contrary to Section 179A (3) (a) of the Criminal Offences Act 1960 (Act 29); stealing, contrary to Section 124 (1) of the Criminal Offences Act; money laundering, contrary to Section 1(1) (c) of the Anti-Money Laundering Act 2008 (Act 749); and issuing a false cheque, contrary to Section 313A (1) (6) of the Criminal Offences Act.

The third accused, Irene Anti-Mensah, was charged with abetment of crime, namely wilfully causing financial loss to the republic, contrary to Sections 20(1) and 179A (3)(a) of the Criminal Offences Act 1960 (Act 29); abetment of crime (namely defrauding by false pretence), contrary to Sections 20(1) and 131(1) of the Criminal Offences Act; and conspiracy to steal, contrary to Sections 23(1) and 124(1) of the Criminal Offences Act.

The fifth accused, Frank Aboagye Mensah, was charged with various breaches of the Criminal Offences Act 1960 (Act 29) – defrauding by false pretence, contrary to Section 131(1); conspiracy to steal, contrary to Sections 23(1) and 124; and stealing, contrary to Section 124(1). Aboagye Mensah also faced a charge of money laundering, contrary to Section 1(1)(c) of the Anti-Money Laundering Act 2008 (Act 749).

Restitution

Under the agreement reached, the first accused, Daniel Duku, will pay GHC15 million, together with US$26,063, to the Venture Capital Trust Fund (VCTF) and a fine of GHC500,000 to the state.

The third accused, Irene Anti-Mensah, is to pay GHC1.5 million to the Venture Capital Trust Fund (VCTF) and a fine of GHC100,000 to the state.

The fifth accused, Frank Aboagye Mensah, will pay GHC1.195 million to Venture Capital Trust Fund (VCTF) and a fine of GHC100,000 to the state.

In addition, Daniel Duku, is to forfeit about seven properties to the state – the Agyekum Presidential Villa at Adjiringanor and six apartments with three bedrooms each at Georgetown Heights in Kumasi – together with five vehicles, including a Porsche Cayenne and Porsche Panamera.

The three accused are expected to make good on all of these payments within three months from today, 10 July 2020.

The Prosecution

The Prosecution team that secured the conviction was led by the Director of Public Prosecution, Yvonne Atakora Obuobisa. Other State Attorneys involved in the case are, Chief State Attorney, Frances Mullen Ansah, Winfred Sarpong, a Principal State Attorney and Hilda Worwornyo, a Senior State Attorney.

Fact sheet

The state’s fact sheet, as presented in court by the Attorney General, states that Venture Capital Trust Fund was established in 2004 by the Venture Capital Trust Fund Act 2004 (Act 680) to provide financial support to small and medium-sized enterprises (SMEs) through eligible venture capital financing companies.

The first accused, Daniel Duku, was the chief executive officer of VCTF between 2010 and 2015. The second accused person, Richard Lassey Agbenyefia, was a former MP for Keta (2005-17) and a past member of the VCTF board of trustees. The third accused, Irene Anti-Mensah, who doubled as the executive assistant to the first accused person, was an investment officer at VCTF.

The fourth accused, Kofi Sarpong, was an investment officer with VCTF. The fifth accused person, Frank Aboagye Mensah, is a businessman and the husband of the third accused. The sixth accused person, Charity Opoku (also known as Charity Ameyaw), was an accountant at VCTF.

As the CEO of VCTF, the first accused, the facts say, facilitated the recruitment of the third and fourth accused persons, who were his work colleagues at the Ghana Investment Promotion Authority (GIPA) to join him at VCTF as his executive assistant and an investment officer. Upon assumption of office, the first accused  introduced a loan scheme named the Development Assistance Fund (DAF) to provide credit directly to individuals and companies, in clear contravention of the VCTF Act and contrary to the objectives of VCTF.

Despite the advice of VCTF’s solicitors the proposed loan scheme was illegal, the first accused managed to obtain the board’s approval for the establishment of the DAF scheme. The first accused, by approval of the board, could only approve loans not exceeding GHC30,000. Any loan above this sum was subject to board approval.

The board also set out strict guidelines under which the loans were to be disbursed.

The state’s fact sheet states that the board approved an amount of GHC1 million, which was later increased to GHC2 million, as a revolving fund for the DAF project. Investigations have shown that the first accused disbursed various sums of money under the scheme, the total of which far exceeded the approved GHC2 million.

Before the appointment of the first accused as CEO and the establishment of the DAF, VCTF operated a scheme that extended loans to farmers in the Northern and Brong-Ahafo Regions to support the cultivation of sorghum. This loan scheme, a special-purpose vehicle (SPV), gave loans to certain venture capital finance companies (VCFCs), namely Sinapi Aba and Techno Serve Company Ltd, for onward lending to farmers. The SPV had a minimum of GHC50,000 and maximum of GHC500,000 as the sums that could be disbursed at any one time to the venture capital finance companies.

The programme ran successfully until the first accused, Daniel Duku, assumed leadership of the Fund in June 2010, when it stopped. However, in or about October 2010, the SPV was reintroduced at the instance of the first accused (albeit with board approval), this time to be controlled directly from the office of the first accused. Duku however could only approve loans of up to GHC50,000. Any lending above the GHC50,000 threshold required board approval.

The facts further state that, contrary to and in flagrant disregard of the approved board thresholds for the CEO, the first accused repeatedly approved loans, purportedly under the DAF SPV, well above the agreed threshold. These loans were made directly to companies, some of which were non-existent. Some of the fictitious companies bore addresses which belonged to the first accused. The accused persons also used the names of a number of companies belonging to other people to obtain loans without the knowledge, permission and or consent of the owners of those companies.

The sixth accused, who was at all material times the accountant at VCTF and a signatory to the VCTF account, aided the first 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 first accused, using these blank cheques signed by the sixth accused, granted loans totalling GHC4.24 million, which resulted in a total loss of GHC12,601,796.25 to the Fund, being principal and accrued interest. The facts noted that the board, upon realising the financial challenges facing the Fund’s sustainability, instructed the first accused in 2013 to stop disbursing loans under the DAF scheme and rather to concentrate on recoveries. However, the first accused misled the board by reporting that he had recovered 81% of the outstanding loans under the DAF, when he knew this claim to be false. Consequently, he obtained the board’s approval to resume disbursements under the DAF scheme. At the request of the first accused, the board, relying on his false report, increased the DAF fund from GHC1.5 million to GHC2 million.

Again, in January 2015, the board instructed the first accused to stop the disbursement of loans altogether and focus on recovering loans already disbursed. These instructions were ignored by the first accused, who authorised the disbursement of more loans without the board’s knowledge or authority.

The first accused’s appointment was terminated in June 2015, yet he remained in office until September 2015, during which period he disbursed more loans to companies. Some of these enterprises belonged to his official driver and cronies. During the period, the first accused obtained $26,063 to attend an official event in the United States of America. Even though he did not attend the event, he failed to pay the money to chest and dishonestly appropriated the entire sum.

The board, on realising that the first accused had not attended the event, directed him to refund the $26,063 to VCTF, in response to which directive the first accused issued false cheques to VCTF, which were not honoured upon presentation at the bank.

The second accused, too, obtained loans in the name of companies based on false representations to VCTF, without the knowledge, permission or approval of the owners of the companies. In other instances, the loans were obtained in the names of non-existent companies.

The third and fourth accused, who were responsible for evaluation and processing of loan applications to VCTF, failed to conduct due diligence on loan applicants. Rather, they facilitated the granting of loans through falsified records, by entering false information on loan application forms.

Wilberforce Asare

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