The Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development (AAMUSTED) in Kumasi has been directed to initiate legal action against SIC Life Savings and Loans Company Ltd to recover locked-up investments amounting to GH¢33 million.
The Public Accounts Committee (PAC) of Parliament gave the directive after it heard that the company had defaulted on its agreement with the university to monthly installment payment of GH¢100,000.00 each on two investment portfolios.
Dr James Klutse Avedzi, Chairman of PAC, speaking at yesterday’s public hearing in Accra, said the company had invited legal redress when it failed to honour its own terms of payment.
“Take legal action against the company to recover the money. You cannot go against your own promise of paying back an amount on monthly basis. They must respect their own terms.
The company will be compelled to take the necessary action for payment when they are served,” he stated.
Prof. Frederick Kwaku Sarfo, Vice Chancellor of AAMUSTED, responding to queries at the hearing, said the university had so far recovered GH¢1.2 million out of the investment which initially amounted to GH¢28,439,060, as stated in the 2022 Auditor General’s report.
After agreeing to the monthly installment payment of GH¢100,000.00, he said the company paid for only six months and had defaulted since 2022, citing the current economic and financial situation as reasons for failure in honouring their part of the agreement.
He noted that the university had already engaged the services of solicitors to assist redeem the investments.
Prof. Sarfo stated that the university had developed a policy to guide future investments to avoid lock-up situations.
Jeff Boakye Dankwa, Director of Finance, AAMUSTED, said as per recent certificate of investment, the total investment had jumped to GH¢33 million including interests.
The 2022 Auditor General’s report stated that, during review of investment portfolios that the University of Education Winneba (UEW), in 2019 invested funds amounting to GH¢12,446,761.19 and GH¢7,677,472.17 at the rate of 19 per cent on behalf of Kumasi and Mampong campuses (now AAMUSTED) respectively with SIC Life Savings and Loans Company Ltd.
It noted that, the investment accrued a total value of GH¢17,072,234.07 and GH¢11,366,826.29 for Kumasi and Mampong campuses respectively as of December 31, 2021.
“Further review disclosed that, in 2021, Mampong campus requested a redemption of GH¢1,598,173.63 of its investment but the management of SIC Life Savings and Loans Company Ltd could not honour the request,” the report added.
However, SIC Life Savings and Loans Company Ltd said it could not honour the withdrawal of GH¢1,598,173.63 due to financial constraints but could pay a monthly instalment payment of GH¢100,000.00 of which the management of AAMUSTED, Mampong rejected and proposed a monthly payment of GH¢250,000.00 but SIC Life Savings and Loans Company Ltd did not agree to it.
The management of AAMUSTED, Mampong subsequently accepted the initial GH¢100,000.00 monthly payment proposed by SIC Life Savings and Loans Company Ltd.
“The insolvency faced by SIC Life Savings and Loans Company Ltd occasioned by the financial sector clean-up resulted in the irregularity.
The university could lose the total accrued amount of GH¢28,439,060.20 due to the present predicament of SIC Life and Savings Company Ltd,” the report added.
It recommended to management to liaise with the Governing Council of AAMUSTED to take pragmatic steps to recover the money by renegotiating for better terms of payment than the GH¢100,000.00 monthly payment
