‘WAMCO never engaged in illegalities’
The management of the West African Mills Company Limited (WAMCO) says recent publications to the effect that the company and its majority German shareholder are engaged in some illegalities in its dealings with the Ghana Cocoa Board (COCOBOD) are not true.
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It has described the allegations as false and calculated to create wrong impressions to undermine the private liquidation process being undertaken by Fidelity Securities Limited.
The company said there had been media reports about its indebtedness to the COCOBOD ranging from $49 million to $57 million, saying that was not true.
A statement issued by the management of the company said: “We wish to state that WAMCO does not owe any such debt to COCOBOD. The differences in the figures being bandied around is a clear vindication of lack of truth in the allegation. The allegation is an invention by the COCOBOD to explain away its inability or unwillingness to supply WAMCO with sufficient cocoa beans for WAMCO’s operations as COCOBOD is obliged to do under the Joint Venture Agreement existing between WAMCO and COCOBOD.”
The agreement
According to the statement, WAMCO was established under a joint-venture structure between the government of Ghana, represented by the COCOBOD, holding 40 per cent, and a German investor holding the remaining 60 per cent of the shares.
The joint venture became effective in 1992 following a major investment and rehabilitation of the facilities by the majority shareholder.
Under the agreement, the majority shareholder had the mandate to supervise the day-to-day operations and also appoint the managing director.
The company, it said, had two separate factories in Takoradi with a combined capacity to process approximately 70,000 metric tonnes of cocoa beans and shea kernel per year.
“The company employs more than 250 workers and its products enjoy excellent reputation and are on high demand on the international market,” it said.
But, the statement claimed, COCOBOD’s supply of cocoa beans to WAMCO, which is supposed to be up to its capacity level of 70,000 metric tonnes a year, dropped to 35,000 metric tonnes in 2001 and continued to drop over the years and never returned to the original levels.
Unilateral takeover
It said WAMCO operated very well and profitably until 2003 when COCOBOD unilaterally took over the management of WAMCO without any justification.
“In 2003, the COCOBOD, the minority shareholder, took over the running of WAMCO, contrary to the joint-venture agreement, and exclusively ran the affairs of the company up to 2010 without the involvement or consent of the majority shareholder, contrary to the joint-venture agreement,” it said.
On June 14, 2016, it said the Daily Graphic carried a report attributed to COCOBOD to the effect that COCOBOD had advised the public to disregard a publication by Fidelity Securities Limited on the sale of WAMCO.
The management said it found that to be curious, since COCOBOD had been part of every decision that had been taken with regard to the liquidation of the assets of WAMCO, including the said board and shareholders meeting at which the decision to liquidate the assets by private liquidation was taken
Liquidation of assets legal
“The decision to liquidate the assets of WAMCO by mandating an investment bank appointed by management was taken at a board of directors meeting and was approved at a shareholders meeting on 4th November, 2015 and COCOBOD was represented at all the said meetings,” the statement said.
It said that it was, therefore, strange that COCOBOD would turn round to misinform the public about the process and even go ahead to warn the public against the process.
“We, accordingly, wish to inform the public that the process of liquidation of WAMCO assets initiated by Fidelity Securities Limited is a legitimate process sanctioned by the shareholders, the board of directors and management of WAMCO in accordance with the regulations of the company,” it added.