The Member of Parliament for Bongo in the Upper East Region, Edward Abambire Bawa has raised issues with how the Bulk Oil Storage and Transportation (BOST) company has gone ahead to pay an additional $3million to Springfield Energy in a dispute, against the advice of the company's legal counsel after Alfred Obeng exited as Managing Director
According to the MP, the new Managing Director, Mr George Mensah
Read the Member of Parliament's opinion on the BOST issue below
MR. GEORGE MENSAH
Over the years the Bulk Oil Distribution Companies (BDCs) have had a relationship with the Bulk Oil Storage and Transportation company (BOST), in which BDCs without tank farms store their products at the tank farms of BOST at a fee.
In some occasions, these products are not accounted for by BOST for various reasons. This occasions what is
referred to as product losses, a liability chargeable to BOST.
It is therefore with this background that:
• Springfield Energy brought its product to BOST tank farm in 2013 October for storage.
Part of the product could not be accounted for. Springfield Energy took advantage of this loss and made a claim of $20,226,717.75 which was far more than the actual quantity lost. This was at a time when Mr. John Kojo Akoful, now the head of Finance, was the Acting M.D. of BOST.
• Therefore on the 18th November 2015, Springfield Energy filed a writ against BOST at an Accra High Court, claiming the following:
I. Recovery of $20, 226,717.75 for their lost products
II. At the Interest rate of 19% from October 2015 till the final payment of the principal;
III. Loss of profit of $3,420,000.00
• When Mr. Awuah Darko assumed office as the M.D. of BOST, and having studied the documents on this case, challenged all the claims of Springfield and hence engaged Ernst and Young Audit Firm to audit the transaction to ascertain the actual quantity of products lost. Ernst and Young found out that the actual quantity of product lost was worth $11,104,143.2.
Both BOST and Springfield agreed and accepted this finding.
• A summary
BOST filed a stay of execution at the court to enable
The High Court granted it partially and ordered the payment of the cost of actual product lost as ascertained by the auditors and agreed by both parties.
This was $11,104,143.29. On the 20th December 2016, BOST under Awuah Darko paid the said principal amount of $11,104,143.29 through a Five Year Term loan from Fidelity Bank.
The remaining unresolved issue of the 19% interest rate being claimed by Springfield on the principal is still pending at the High Court and Court of Appeal.
• Springfield in September 2017, under Mr. Alfred Obeng's tenure as M.D., approached BOST to have the matter settled out of court.
The Head of Finance, Mr. John Kojo Ankoful (under whose tenure as acting MD when this product loss was occasioned), and the Head of Legal Department,
This was supposed to be the interest on the principal($11,104,143.29). Alfred Obeng ordered the payment of $4million as part of the $9 million interest payment before the settlement agreement was even signed. This was on the 27th September 2017.
It is important to note that this was without the presence or advice of the external lawyers who were handling the case in court.
• The Head of Legal Department,
For the purposes of
The modus operandi of Springfield is not new. It has been so since the inception of this case. Let Springfield boldly go to the court, prove their case in accordance with the law and let the court deliver its
BOST will then have the option of satisfying the
That way it would be seen that BOST stood its grounds and fought a good battle to protect the public purse. That way nobody can accuse all those involved in the case of creating, looting and sharing. This is our position on the matter “
• As a result of this advice the settlement agreement was not executed - both parties did not sign and therefore no one can refer to any duly executed settlement agreement. BOST made it clear to Springfield that they cannot claim interest
• Against the legal advice of BOST external lawyers, George Mensah
BIG QUESTION: why would Mr. GEORGE MENSAH
To supply the required response to this question which is boggling the minds of many Ghanaians, I proposed the following:
1. The interdiction of the two officers
2. A full-scale investigation of the issues to ascertain the facts
3. A full audit of the systems at BOST to identify challenges of this nature, and propose solutions to these challenges to forestall future occurrences.
I hope and pray the New Minister for Energy will take
EDWARD ABAMBIRE BAWA
MP FOR BONGO