Questions have been raised over the handling of a major loan recovery case involving SIC Life Savings and Loans, Equity Savings and Loans Limited, and a private legal firm.
According to the brief facts of the case, SIC Life Savings and Loans advanced a loan to Equity Savings and Loans Limited, but the borrower subsequently defaulted on its repayment obligations.
In May 2020, SIC Life Savings and Loans engaged Baffour Awuah, a Senior Partner at Sarkodie Baffour Awuah and Partners, to pursue the recovery of the outstanding debt.
The principal amount involved was GH¢6,301,018.76. Under the agreement, Baffour Awuah was entitled to receive 15% of the principal amount as legal fees, together with an additional 1% for expenses associated with the debt recovery process.
High Court Awards GH¢10.8 Million Against Equity Savings and Loans
After about two years of legal proceedings, the High Court on July 18, 2022, entered a summary judgment against Equity Savings and Loans Limited.
The court initially awarded approximately GH¢10.86 million in favour of SIC Life Savings and Loans.
As part of efforts to enforce the judgment, a 31.93-acre parcel of land belonging to Equity Savings and Loans was attached by the court on December 20, 2023.
The court subsequently appointed an auctioneer to dispose of the property through a public auction. The land was assigned a reserve price of GH¢25 million.
Judgment Debt Increased to GH¢14.8 Million
The situation took another turn on May 28, 2024, when a revised judgment increased the amount owed from approximately GH¢10.86 million to GH¢14.8 million.
However, only about two months later, a company known as ECO Swiss was reportedly established and expressed interest in acquiring the attached property for GH¢5 million.
The proposed purchase price was substantially below the court-approved reserve price of GH¢25 million, raising questions about the valuation and disposal of the property.
SIC Life Accepts GH¢5 Million Settlement
Despite the revised judgment debt standing at approximately GH¢14.8 million, SIC Life Savings and Loans reportedly agreed to accept GH¢5 million as full settlement of the outstanding judgment debt.
The transaction has raised concerns over the decision-making process surrounding the recovery of the loan and the financial implications for the savings and loans company.
Further questions have also emerged regarding the payment of legal fees. Despite SIC Life accepting GH¢5 million as settlement, the legal fee arrangement was reportedly varied in a manner that allowed Baffour Awuah to receive 15% based on the earlier principal amount, rather than the reduced settlement figure.
GH¢1 Million Transfer to Former CEO Investigated
The case also took another significant turn following findings that GH¢1 million had allegedly been transferred by Baffour Awuah to the former Chief Executive Officer of SIC Life Savings and Loans.
According to the investigation, the transfer was made even after the individual had ceased working for the company.
Investigators reportedly found that Baffour Awuah was unable to provide a satisfactory explanation for the GH¢1 million transfer.
The development has raised broader concerns about corporate governance, financial accountability, loan recovery practices and internal controls within Ghana’s financial sector.
The case highlights the importance of transparency and proper oversight when financial institutions recover large debts through court processes, asset seizures and public auctions.
It also underscores the need for strong corporate governance mechanisms to ensure that decisions involving judgment debts, legal fees, property sales and financial settlements are properly documented and made in the best interests of the institution and its stakeholders.
High Court Statement
High Court Statement 2
Source: newsthemegh.com