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NTHC financial audit: Report indicts Dr Barnor but former MD denies charges

An audit conducted on National Trust Holding Company (NTHC) has disclosed that a GH¢2,600,000 unsecured commercial paper meant to make part payment for a 100 acre of land at Santeo Hills was issued without recourse to laid down procedures.

The amount was approved on July 5, 2013, to a joint venture between NTHC Properties and Ericdai Estates.

The amount was approved by the company’s former Managing Director and head of corporate finance and research, Francis Nyoagbe.

But the former Managing Director, Dr Albert Walter Quarcopome Barnor, has denied the charges saying the accusations are false


According to the audit report, Dr Barnor approved the unsecured commercial paper without assessing the credit worthiness of the joint venture.

“We noted from our review of the commercial paper agreement that the purpose of this facility was to buy 100 acres of land.

“This was not inline with SEC guideline which requires that commercial papers are issued to support working capital,” the report said.

Additionally, the report revealed that apart from NTHC not following SEC guidelines for investment in commercial paper, Dr Barnor and Mr Nyoagbe did not comply with the commercial paper approval process, including an assessment of the joint ventures' ability to repay the facility

“Dr Barnor and Mr Nyoagbe did not document the justification for approving an unsecured commercial paper to the joint venture,” the report added.


On January 21 2013, the audit report said, Dr Barnor approved another loan facility (commercial paper) of
$7,000,000 to TG Automobile Limited.

The purpose of the loan was to finance the construction of 32 apartments at Dzorwulu in Accra.

The loan was disbursed in two tranches of GH¢9,500,000 and GH¢4,000,000 on January 24, 2013 and February 21 2013, respectively.

However, findings of the report indicate that NTHC did not appraise the credit worthiness of TG and did not verify the existence, value and ownership of securities (32 apartments to be built and Office Complex and Warehouses situated at number 13 St. John's Road, Achimota) pledged.

A review of the commercial paper agreement between NTHC and TG revealed that TG did not honour some terms in the agreement.

The audit report revealed that TG did not place a GH¢600,000.00 fixed deposit with NTHC.

It also did not establish personal guarantees from directors of TG.

Dr Barnor responds

But responding through his lawyers, Alliance Law Unlimited, Dr Barnor denied the accusations insisting that they went through the right processes in all their transactions for the acquisition of the land.

He said credit requests were subject to due diligence to determine viability of proposed projects and businesses as well as capacity to repay based on credit manual by the corporate finance department.

He said the property investment desk helped the evaluation process routinely by assessing the collateral securities and subsequently registering the collateral security on the Bank of Ghana Collateral Registry, in accordance with the Borrowers and Lenders Act 2008, Act 773.

“NTHC carried out its lending activities under the Borrowers and Lenders Act 773. References to the Securities and Exchange Commission guidelines in relation to NTHC lending are misguided, he wrote through his lawyers.

“There was due diligence on TG prior to approval of the loan for it to purchase the property. The credit report prepared by Corporate Finance together with the report on the collateral prepared by the Property Investment Desk should be on the NTHC’s file of TG, he added.


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