After investigations conducted for over two years by the Economic & Organised Crime Office (EOCO), with the benefit of advice from the Office of the Attorney-General and Ministry of Justice, the Chief Executive Officer (CEO) of K-Ofori Limited and Kwadwo Boachie Enterprise, has been exonerated of any wrongdoing in a suspected tax evasion and money laundering case.
In her advice on behalf of the Attorney-General, the Director of Public Prosecutions (DPP), Yvonne Atakora Obuobisa, recommended the discontinuation of the case against Frank Kwadwo Ofori, the CEO of K-Ofori Limited, who is also a 10 per cent shareholder of Universal Steel Company (USC) Limited, a company at the centre of tax evasion claims.
“No evidence has been gathered to substantiate these claims. Mere suspicions are not enough to bring any charges against them,” the A-G’s advice stated.
The A-G’s directive was based on the request by the Executive Director of EOCO, Commissioner of Police (COP) Maame Yaa Tiwaa Addo-Danquah, to conduct a forensic audit into the activities of USC which is operated by foreigners.
When contacted, the Lead Consultant, T. Forson & Co, Anthony Forson Jnr, commended the Attorney-General office and EOCO for the thorough investigation that led to the exoneration of his client, Mr Ofori.
Per the terms of reference for the investigations, suspects – Ofori, Hani Mikati, Marwa Hamwi and Sallam Mohammed Gharib – were arrested as persons behind USC.
In their cautioned statements, they each denied the offence of tax evasion, money laundering and participating in organised crime.
EOCO’s investigations into the matter revealed that the company registration documents of USC obtained from the Office of the Registrar of Companies showed that the company commenced business on August 13, 2004, with Mikati Abdul and Qaraman Sameer as the initial shareholders and later Akosua Aboagye Ofori, Frank Ofori and Sethi Brothers Company Ltd joined as shareholders.
It further showed that Frank Kwadwo Ofori and his wife Akosua Aboagye Ofori since 2016 owned 10 per cent of the shares in USC, while Sethi Brothers owned 30 per cent of the shares.
After investigations into the bank records of K-Ofori Company Ltd for the period 2019, the report said no fictitious banking activities were discovered, adding, “All transfers from K-Ofori Ltd were linked to USC and its agents and affiliates”.
The report further added that the bank could not also provide the EOCO team with any information regarding the accounts of USC upon request.
It added that bank statements of the three foreign suspects showed that Marwan Hamwi withdrew a total amount of GH¢5 million from the company’s account but the investigation did not reach a conclusion as to why the said amount was withdrawn and what it was used for.
According to the report, Abdul Majid Mikati, who was also a Board member of USC, had a total amount of GH¢5.9 million credited to his account by DHL Ghana Limited. The investigations did not establish the purpose for which these amounts were credited to his account.
“A total amount of GH¢5.8 million had been credited to the Zenith Bank account of Salem Gharib without any justification.
“USC did not keep any financial records from inception that the investigation team could rely on to establish whether the 2018 financial statement received by the team was overstated or understated.
“The accounting firm K. Kye Accounting firm that prepared the 2018 financial statement of USC did not prepare it in line with International Financial Reporting Standards (IFRS),” EOCO’s investigation revealed.
Again, the investigation found out that the company was duly registered at the Social Security and National Insurance Trust (SSNIT) and the Ghana Revenue Authority (GRA) and owed SSNIT GH¢91,990.73 for the period of November and December 2018, adding: “As of June 2021, USC owed GRA an amount of GH¢684.81 million, exclusive of penalties.
The amount is made up of custom duties, corporate income tax, Value Added Tax (VAT), income tax of wages and salaries otherwise known as pay as you go (PAYE) and withholding tax.
“The company had a bonded warehouse guarded by customs officials to ensure payment of necessary duties are paid before the goods leave the warehouse, USC, however, managed to get goods out of the warehouse without fulfilling its obligations.”
“Although the team was able to establish that the 2018 Financial Statement of US did not reflect the true state of affairs, it could not establish for a fact whether the expenses were overstated or revenue understated since there were no records to work with,” the investigations revealed.
In its advice, the Attorney-General and Minister of Justice concluded that there was no evidence of money moving directly from USC to Kwadwo Boachie Enterprise as it was revealed that all transactions between them were conducted on cash basis.
The A-G added that since investigations were still ongoing, it would be prudent for investigations to be concluded and a complete docket forwarded to A-G’s office for comments on the culpability or otherwise of any of the suspects in question.
“However, it can be gleaned from the docket that your outfit has not made any conclusive findings on Frank Kwadwo Ofori, a 10 per cent shareholder in USC.
“It is pertinent to note that unless there is direct evidence to prove that he was engaged in the day-to-day management of affairs of USC, he cannot be held liable for the tax evasion of the company.
“In respect of the charges of money laundering and participating in organised crime, investigations revealed that neither him nor his company K-Ofori Limited have engaged in any form of money laundering and organised crime as there is no criminality in cash payments made by Frank Kwadwo Ofori through his company to USC for goods supplied to him,” the DPP noted.
She, therefore, concluded that Mr Ofori could not be held liable for any of the offences levelled against him, adding, “I accordingly disrecommend his prosecution”.