Sale of GNPC drill ship not value for money — Tsatsu

A former Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC), Mr Tsatsu Tsikata, says the sale of the corporation’s drill ship to offset its indebtedness to Societe Generale (SG) did not give money for value.

According to him, the Discoverer 511 was economically viable and critical to GNPC’s exploration aspirations, adding that the drill ship had a lot of potential and at the time he left office in December 2000 “it had clear value to the corporation”.

“A distress sale situation will not be the best way to express the value of assets,” he told the Judgement Debt Commission in Accra yesterday when shared his opinion on the transaction between the GNPC and SG that led to the payment of $19.5 million judgement debt to the latter.

Sale of drill ship
The NPP government had sold the GNPC drill ship for $24 million in 2001 to offset the corporation’s indebtedness to SG.

A minister of Energy in the Kufuor administration, Mr Albert Kan-Dapaah, and his deputy, Mr K. T. Hammond, had told the commission last Monday that the decision to sell the drill ship had been prudent.

The two former ministers had contended that given the GNPC’s financial challenges at the time, and the fact that SG had obtained a judgement debt against the corporation in a London court and a precautionary arrest of the Discoverer 511 in Oman, the government did not have any other option than to sell the drill ship.

However, in his 85-minute testimony, Mr Tsikata countered Messrs Kan-Dapaah and Hammond’s claims and suggested that the government’s decision to sell the drill ship was untoward.

“It’s not clear to me why a minister or a deputy minister should be selling a drill ship or assets that they have little knowledge about,” he remarked, in apparent reference to the power of attorney given to Mr Hammond to go to London to, as it were, sell the drill ship and negotiate with SG for an amicable payment settlement.

Tsatsu’s challenge
Demonstrating steadfastness to his testimony, Mr Tsikata said he would submit to a cross-examination by anyone who contested his claims and pleaded with the Sole Commissioner, Mr Justice Yaw Apau, to permit such cross-examination.

However, Mr Justice Apau declined the request, saying the commission was not a trial court and so it could not allow for cross-examination of witnesses.

Proceeding with his testimony, Mr Tsikata said at the time of leaving office as the GNPC boss, the drill ship was economically viable and a Norwegian brokerage firm had expressed interest to buy it.

He said the GNPC did not sell the ship because at that time it was more interested in an investment partner who would help increase the depth capacity of the ship.

He said the GNPC had extremely valuable assets such as Westel, which was sold for $120 million, adding that a company with such asset portfolio should not be rubbished in such a manner.

Influencing government
Mr Tsikata said the sale of the drill ship was clearly one of the classic situations where foreign companies took undue advantage of changes in government to get what they wanted.

According him, there had been a prior attempt by SG to seek the “mighty hand of the government” in its favour when officials of the bank approached then Vice- President J. E. A. Mills and the Minister of Finance, Mr Kwame Peprah, to claim compensation.

But they (SG officials) were told that since the GNPC and SG were private entities, the government did not have to step in.

Mr Tsikata said following a press conference addressed by Mr Kan-Dapaah in August 2001 on the GNPC/SG transaction, “I realised that the government had now been prevailed upon to accept SG’s position”.

Suit and counter-suit
He said until the end of his tenure as CEO of the GNPC, there was neither a judgement nor a judgement debt against the corporation or the government.

He said SG had sued the GNPC in a court in London, claiming $40 million, but after a careful study of the claims, the GNPC contested SG and even counter-sued the bank because, as an adviser to the GNPC, SG had acted negligently and so “we did not accept liability”.

Credit lines and mortgage
The former GNPC boss said the transaction between the GNPC and SG had to do with unsecured credit lines, meaning there was no security attached.

He said recognising that SG had made some payments to the GNPC, there was the need to reimburse it, and so the two parties subsequently entered into discussions in that regard.

But given the soundness of GNPC’s contention, there was an indication that SG was willing to settle for a lesser amount than the $40 million it had earlier claimed, as it subsequently settled on $20 million as reimbursement.

He said per its calculations, however, the GNPC settled on $12 million as the reimbursement due SG.

On allegations of using the drill ship as a mortgage in GNPC’s transaction with SG, Mr Tsikata explained that in the context of the settlement negotiations, both parties agreed on a mortgage document but the text did not contain any redeemable payment.

That was why in SG’s statement of claim it did not make reference to the mortgage document, he added.

Brief to Attorney-General
Mr Tsikata said some time in 2001, upon the assumption of office of the Kufuor administration, he was informed by the acting CEO of the GNPC that the Attorney-General wanted a briefing on the court proceedings, to which he obliged.

He said he had highlighted in his brief to the Attorney-General that SG had undertaken some court proceedings against the GNPC, such as an attempt to attach Discoverer 511, at a court in the US but it failed in the bid.

Earlier, the Sole Commissioner had explained that the commission was not mandated to investigate the GNPC, adding that its direction was to probe judgement debt payments.

Source: Daily Graphic