Allegation that Ibrahim Mahama owed UT Bank GH¢302 million inaccurate

BY: Graphic.com.gh
Mr Ibrahim Mahama (right) conducting the media round the facility in Tema
Mr Ibrahim Mahama (right) conducting the media round the facility in Tema

The Supervising Site Engineer of the Dzata Cement Limited, Mr Fiifi Yawson, has said the company has been issued with a licence to import 1.2 million metric tonnes of cement to test-run the plant.

He said after the test, the plant would become fully operational by the end of the year.

Mr Yawson made this known after he and the Chief Executive Officer of the Engineers and Planners Company, Mr Ibrahim Mahama, had conducted a team of journalists round the facility in Tema on Sunday.

"We have to test-run the plant to ensure that all skills and units in the production line are running,” he said.

He said the plant’s cement would be a high grade product to compete with others on the market.

Mr Yawson said so far 80 per cent of the construction and installation works on the facility, costing $200 million, was complete.


"When completed and fully operational, the plant will produce 2.6 million metric tonnes of cement annually," he said.

The factory is located on a 10-acre land near the Tema Port. The technology to be deployed is from Germany and was developed by Haver and Boecker.

The cement grade to be produced by the plant is ordinary Portland cement, which will be imported for the plant, which will bag an average of 120 bags per minute from the two production lines.

A solicitor of the company, Mr Reindorf Twumasi Ankrah, said the allegation that companies ''owned" by Ibrahim Mahama owed the UT Bank GH¢302 million was not accurate and did not reflect the facts and documents.

He said a group of companies and Dzata Cement jointly conceived the idea to establish a cement factory in Ghana and accordingly pooled resources to actualise the vision.

"Pursuant to the vision, Dzata Cement put together a proposal for funding and sent it to a number of banks for financial support," he said.

He explained that the UT Bank, after thorough due diligence on the companies, agreed to offer financial support to Dzata Cement on terms.

"The outlining agreement which culminated in the UT Bank offering financial assistance was that it will provide liquidity support for Dzata Cement until the factory commences operations and starts selling its cement.

“The agreement was that all payments or proceeds from the sale of the cement will be paid directly into an account owned and operated by the UT Bank,” he added

Mr Twumasi Ankrah said it was agreed by the parties that UT would have a branch on the premises of the factory, which would serve as pay point for all products purchased by customers.

He said the projected revenue per day from the sale of cement was a minimum GH¢1 million, and with that projection, Dzata Cement would have paid off the loan with interest in less than five years.

The solicitor said it was agreed that the UT Bank would finance the cement factory until it became operational, but that, unfortunately, could not happen due to the revocation of the licence of the bank last year.

"At the time the bank’s licence was revoked, the records showed that the project was about 80 per cent complete," he added.

He said due to the unexpected revocation of the bank’s licence, Dzata Cement had to resort to other financiers for support to complete the project .

He said in February 2018, the government gave the cement company clearance to import 1.2 million metric tonnes of bulk cement for re-bagging based on evidence of an installed bagging plant.

He said the loans advanced to Dzata Cement were to be repaid from the proceeds of the sale of cement.

“Clearly, at the time the licence of the UT Bank was revoked, Dzata Cement could not have been in a position of default, because the factory was not operational then,” Mr Twumasi Ankrah said.

Background

A financial autopsy report into the collapse of UT Bank linked its demise to huge non-performing loans, including those of Ibrahim Mahama, a brother of former President John Mahama.

Mr Ibrahim Mahama is said to owe the UT Bank GH¢302 million, a facility that was extended to his four companies in ways that required the bank to bend over backwards.

His persistent defaulting payments exposed the bank to great risk and put shareholders in great pain.

The Bank of Ghana, in August last year, revoked the licence of the UT Bank for engaging in acts that jeopardised depositors’ funds, as well as endangered the country’s banking system.