CATALOGUE: Auditor-General’s Report on assemblies that unduly paid Zoomlion over GH¢40M

“Zoomlion is also alleged to be involved with a bogus Malaria Control Programme with the NHIS and has a preferential payment treatment over suppliers of services to the scheme, such as private medical practitioners/clinics and pharmacies. This year alone, Zoomlion is alleged to have been paid GH¢35 million at the expense of providers of critical services to NHIS. No wonder the scheme has collapsed under John Mahama’s watch”.

The above was the concern of the then-opposition New Patriotic Party (NPP) at a press conference held on November 16, 2016, less than a month to the December 2016 Elections.

The press conference, which was addressed by the party 2016 Campaign’s policy Advisor, Boakye Agyarko, was organized to expose the erstwhile Mahama government’s shady dealings with Zoomlion Ghana Limited, a waste management company.

The NPP led, by its presidential candidate, Nana Addo Dankwa Akufo-Addo, was worried about how the National Democratic Congress (NDC) government headed by John Dramani Mahama, continued to waste the country’s scarce resources through dubious contracts with companies such as Zoomlion and its sister companies.

Zoomlion’s involvement in corruption scandals

Zoomlion and its Chief Executive Officer (CEO), Joseph Siaw Agyepong, who is also the Chairman of the Jospong Group of Companies (parent company of Zoomlion), gained notoriety for their roles in most of the corruption scandals that hit the Mahama administration.

The infamous Subah Scandal, which broke out in 2013, involved one of Mr. Siaw Agyepong’s companies, Subah Infosolutions Ghana Limited.

Subah Infosolutions, an IT firm, was contracted by the Ghana Revenue Authority (GRA) in 2010 to provide telecom traffic monitoring services for the state agency.

But investigations by Samuel Agyemang of Metro TV uncovered that even though the firm was paid a whopping GH¢144 million, it failed to render the services for which it received the payments. The journalist was stopped from publishing the investigations, so he posted it on YouTube and resigned from the station, which was later bought by the Jospong Group.

The government at the time, however, disputed the figure, stating that it paid the firm GH¢75 million and not GH¢144 million as reported by the media. A committee, which the government subsequently set up to investigate the matter, said there was a valid contract, but it could not prove that the company had done the work to merit the payment.

In 2013 the GYEEDA Scandal exposed by Manasseh Azure Awuni who was with Joy FM at the time, Zoomlion and other subsidiaries of the Jospong Group were implicated in various financial malfeasance and fraudulent deals.

The Ministerial Committee, which was set up by the government to probe the scandal after the media reports, found Zoomlion and its sister companies to have received millions of cedis as payments for works they did not do and duping hard-working but poor Ghanaians who were engaged under various modules of the agency.

The Committee recommended the abrogation of all the contracts under GYEEDA including those awarded to Zoomlion and its sister firms and the companies, as well as individuals involved sanctioned.

The government took some actions on the committee’s recommendations, cancelling many of the contracts and prosecuting a businessman, Philip Assibit, who received GH¢4 million as payment for services he and his company did not render and also, a former National Coordinator of GYEEDA, Abuga Pele, for aiding Mr. Assibit to defraud the state.

However, it neither abrogated the contracts with Zoomlion nor took any action against the company and its CEO. What it did, instead, was to reward the company with more dubious contracts that allowed it to continue to milk the state.

 What the NPP said about the scandals involving Zoomlion while in opposition

The NPP, at its press conference, concluded that the government could not apply any punitive measure against Zoomlion and its CEO because the president, John Dramani Mahama was neck-deep in their fraudulent activities.

For Nana Akufo-Addo, the GYEEDA and Subah scandals were proof of the president and his government’s involvement in grand acts of corruption.

He described the actions taken by the Mahama administration as a “sham” and promised to jealously protect the public purse and retrieve every single penny the government and its friends had stolen as well as prosecute them if Ghanaians voted him in the elections.

NPP in Government

When Akufo-Addo came into office in 2017, he visited some of Mr. Siaw Agyepong’s businesses and showered praises on him.

The president, during the visit, described the allegations of corruption against the businessman and his companies, which he used to campaign for his election, as controversies which “come with being at the forefront of doing businesses”, and went ahead to express his confidence in him.

Anti-graft crusaders condemned the president’s comments, arguing that his utterances were not only a betrayal of the trust Ghanaians reposed in him but an endorsement of corruption.

The president and his government in subsequent actions reinforced the sentiments of the crusaders.

In 2017, under President Akufo-Addo’s watch, an investigative report by JoyNews’ Manasseh Azure Awuni unearthed fresh allegations of corruption against the Jospong Group.

The report revealed that the Ministry of Local Government and Rural Development had signed contracts worth GH¢98 million with 11 subsidiaries of the Jospong Group of Companies to undertake fumigation exercise across the country when Zoomlion Ghana Limited had already been paid by the district assemblies and the Ministry of Health to do the same job through multiple contracts.

It further exposed how the Jospong Group of Companies inflated a waste bin contract awarded to it through sole-sourcing by at least GH¢130 million.

Following the exposé, the police launched an investigation into the matter and subsequently submitted a docket to the Ministry of Justice and Attorney-General.

But Nana Akufo- Addo, just like former president Mahama, has turned a blind eye to the sins Mr. Siaw Agyepong and his Jospong Group of Companies have committed. Rather, he has led his government to reward the business for, probably, defrauding the state with impunity, by renewing most of the shady contracts.

A Finance Ministry’s response to an RTI request by The Fourth Estate also revealed that the Akufo-Addo government has disbursed all GH¢156 million of the over GH¢264 million realized from the Sanitation and Pollution Levy imposed on Ghanaians to Sewerage Systems GH. Ltd, another company of Mr. Agyepong.

Zoomlion’s ongoing contract with government

Zoomlion GH. Ltd has 2 major contracts – Sanitation Improvement Package (SIP) and Fumigation – aside the Youth in Sanitation contract, with the various MMDAs across the country, currently running.

These contracts were first signed under John Agyekum Kufuor administration and have been renewed under the current government.

The Auditor-General (A-G), in its annual report on the management and utilization of the District Assemblies Common Fund and other Statutory Funds, has, on countless occasions, cited the waste management company for various contract breaches.

In most cases, the A-G recommended stoppage of payments to the company and refund of monies it unduly received. And in some cases, an abrogation of the contracts.

However, the administrator of the District Assemblies’ Common Fund (DACF) continues to deduct from the Assemblies’ share of the DACF at source and pay to Zoomlion GH. Ltd without even ascertaining, in almost all cases, whether the company has rendered services to or has valid contracts with the assemblies to merit the payments.

This has resulted in payments made to the company for absolutely no work done or in a number of cases, without contractual agreements.

Zoomlion receives undue payments to the tune of GH¢40.4 million between 2017 and 2020

In its report on the 2020 Management and Utilization of the District Assemblies Common Fund and other Statutory Funds, the Auditor General said the payments were illegal and unconstitutional

The Fourth Estate’s analysis of the A-G’s report for the years; 2018, 2019 and 2020 indicates that the state lost, at least, GH¢40.5 million to Zoomlion GH. Ltd in payments unduly made to the company.

This includes an amount of GH¢30,590,415.58 the company received as payments for works it failed to execute and another, GH¢9,871,090.00 paid to it without any contractual agreement.

In a related development in 2020, the Auditor-General asked Zoomlion to cough up GHc 95 million, which one of its waste management subsidiaries, Sewerage Systems Ghana Limited, received from the DACF.

The state’s chief auditor ordered the Administrator of the DACF, Irene Naa Torshie Addo, to recover the fund which went into waste treatment plant construction by the Sewerage Systems Ghana Limited (SSGL).

SSGL has been receiving the funds since 2016 without any legal backing, the Auditor-General said. However, the payment of GHc 19 million in 2020, being an outstanding amount for the GHc 95 million, triggered an enquiry by the Auditor-General.

Most of these payments were made between 2017 and 2020.

However, there are many instances in the reports that the A-G could not determine the value of payments unduly made to the company.

This means the total amount of money the state has lost to Zoomlion Gh. Ltd within the period could be way more than this figure.

For the year 2021, even though the company committed similar contractual breaches, resulting in financial losses to the state, the A-G, in all instances of such infractions, failed to quantify the value of the losses.

The Fourth Estate, in this report, details specific instances Mr. Siaw Agyepong’s Zoomlion. Ltd received payments for no work done and other instances, without contractual agreements, resulting in financial losses to the state and depriving the assemblies, whose shares of the Common Fund are deducted at source paid to Zoomlion.

Undue payments to Zoomlion cited in A-G’s report for 2018

The A-G’s report for 2018 indicates that unwarranted payments to Zoomlion Gh. Ltd amounted to GH¢16,073,430.41.

Of this amount, GH¢14,988,980.41 was dished out to the company for absolutely no work done whiles GH¢1,084,450.00 was paid to it when it had no contractual agreements with those assemblies it took the payments from.

The table summarizes undue payments the company received as cited in the 2018 A-G’s report.

Undue payments to Zoomlion cited in 2019 A-G’s report

The 2019 A-G’s report indicates that about GH¢17,008,310.67 of state funds was lost to Zoomlion Ghana Ltd. in payments unjustifiably made to the company.

GH¢8,821,971.67 of this amount were payments made to the company for absolutely no work done and the remainder, GH¢8,186,339.00 was paid to it without contractual agreements.

Below is a tabular representation of instances of undue payments made to Zoomlion as cited in the report for 2019.

Undue payments to Zoomlion cited A-G’s report for2020

The A-G’s report for 2020 reveals that a total amount of GH¢7,379,764.50 was unduly paid to Zoomlion Ghana.

Of this amount, GH¢6,779,463.50 was paid to the company for no work done while the remaining GH¢600,301.00 was paid to it when there was no existing contract to warrant the payment.

Below is a tabular representation of instances of undue payments made to Zoomlion as cited in the report for 2020.