When the National Investment Bank (NIB) faced liquidity challenges in the early 2000s and was about to be sold off, it was Eland International Thailand and its sister company in Ghana, Eland Ghana, that saved it.
The state banking firm needed US$2million to survive. Fortunately, the bank got more than what it had hoped for through a trading business it entered into with the Thai business company and its Ghanaian partner, Eland International Ghana.
Goods worth about US$13million was placed at its doorsteps to trade with after signing Collateral Management Agreement (CMA) with Eland International Thailand/Ghana.
All that the bank needed to do was to store the goods at its various warehouses, look for buyers and sell to them and take its cut while the remaining amount is deposited into Eland International Thailand’s accounts.
To ensure fairness and transparency, an escrow account was opened at NIB for such special purpose trading business.
Saving NIB from collapse
This breakthrough deal was secured by the bank through the assistance of Mr. Daniel Charles Gyimah, who had then been appointed at the Managing Director of NIB.
Mr. Daniel Charles Gyimah until his appointment at MD for NIB was the MD for EXIM Guarantee Company, a company which was also doing business with Eland International Thailand/Ghana.
It all started when in the year 2000, Eland International Thailand/Ghana entered into a rice supply agreement of about 14,400 tons at a CIF value of US$5million with Network Trading Company (NTC) on a credit of two years.
NTC was being managed by Prosper Adabla, Sam Adabla and Edward Boahene. The company had a Collateral Management Agreement (CMA) with EXIM Guarantee Company of which Mr. Daniel Charles Gyimah was the MD. Mr. Daniel Charles Gyimah and Mr. Prosper Adabla were very close friends.
They issued four (4) Promissory Notes (PNs) worth US$1,250,000 with each payable after each six (6) months.
This business transaction was counter guaranteed by GR World, a credit insurance guarantee company which covered the risk of default to EXIM Guarantee Company.
Breaking new grounds
While Eland International Thailand/Ghana was working on the risk and supply documentations, they were informed that Mr. Daniel Charles Gyimah had been appointed as MD for NIB and therefore, have moved the CMA to NIB.
Eland International Thailand/Ghana had no difficulty agreeing to the said transfer of business to NIB since the risk was more acceptable on the face of it to their bankers and or fund managers.
Since NIB wasn’t on a sound footing financially, it incorporated a clause in the CMA that the funds for clearing the goods and all local expenses would be paid by the suppliers out of which same would be recovered from the sales and repaid to Eland Thailand/Ghana.
A credit guarantee premium and expenses of £395,000 would also be paid by the supplier (Eland International Thailand/Ghana) and repaid from the sales proceeds.
Industry sources with knowledge about the said business transaction say since the investment was heavy, Eland International Thailand/Ghana requested for some time to seek the approval from its bankers.
However, NIB took board approval and issued four Promissory Notes (PNs) on the same terms as EXIM Guarantee Company and guaranteed them.
It then insisted that Eland International Thailand/Ghana shift its business from their bankers to NIB with a promise to render better services and charge less for under the CMA.
Eland International Thailand/Ghana which then had a vision to expand its business across all ECOWAS member countries at a little cost agreed to the terms being offered by the NIB and therefore entered into a Collateral Management Agreement (CMA) with NIB on November 10, 2001 for a period of ten (10) years.
Having sealed the deal, it was time for their first transaction. Here, the NIB did not issue or guarantee any Promissory Notes (PNs) for Eland International Thailand/Ghana.
Eland International Thailand/Ghana paid £395,000 to GR World for credit guarantee for NIB and NTC following which the NIB raised an invoice of US$109,600 for the CMA of both companies in January 2002.
Eland International Thailand/Ghana thus shipped 22,000 tons of Thai White Rice 25% broken in 50kg by a chartered vessel MV Sea maiden which arrived at the Tema Harbour in the last and early week of February/March 2002.
However, what appeared to a promising and healthy relationship between Eland International Thailand/Ghana and the NIB, has ended on a soar note with the NIB allegedly using some dubious means to rip off the Thai business firm which is headed by Mr. Arvind Bhatnagar.
The Kufuor Factor
This paper is can report on authority that when the NIB then under its new MD brokered the deal with Eland International Thailand, a request was made for its representatives to travel to Ghana to meet the then President of the Republic, His Excellency, John Agyekum Kufuor.
To this effect, Mr. Bhatnagar and Ms. Sinisa Saksarut, who is the Managing Director of Eland International, India, travelled to Ghana where they were led by Mr. Daniel Charles Gyimah to greet His Excellency, J. A. Kufuor at his residence.
The meeting with the President was to assure the investors that their investments were safe in the country.
But little did they know that they were going to bump into difficulties.
NIB fights NTC
It became apparently clear that NTC lacked the financial muscle to raise enough capital locally for stevedores, loading and unloading, transportation, pallets, fumigation, and bonding of NIB warehouses among others for the first transaction of 22,000 tons of Thai White Rice 25% broken in 50kg.
However, it still wanted to take charge of the rice consignment which was about to arrive and this resulted in a tussle between it and the NIB.
The matter was taken to court and the NIB won the sole control rights over the rice of both companies.
Eland International Thailand/Ghana immediately transferred US$415,000 into is Dollar Account with the NIB as a deposit to earn higher interest rate and also to make it available as a cash against cash collateral to pay temporarily for all the expenses which will be paid back from the first sales to square off the temporary overdraft dollar deposit.
This US$415,000 has allegedly not been paid by the NIB with no explanation to date.
Sources familiar with the transaction say the NIB has since brokering the deal with Eland International Thailand/Ghana allegedly showed complete indifference to the terms of the CMA by neither taking part in discharge operations, repair and upkeep of its leaking warehouses, fumigation, and as well as the provision of security. 15,000 bags of rice were reported missing from the warehouses.
This is in spite of appointing a Warehouse Committee and Credit Committee as only the bank could extend credit at its sole discretion and risk on the CIF value only and not on local expenses and duties as well as VAT among others.
To make matters worse under the CMA, the NIB, we are informed, neither rendered weekly accounts nor provided the daily balances in the escrow account. The bank is alleged to have also opened multiple escrow accounts in Cedis and Dollars and showed transfers from one account but no statements to enable Eland International Thailand/Ghana to check the corresponding credit.
With Eland International Thailand/Ghana feeling frustrated about the doings of the NIB, it threatened legal action ten (10) months into the CMA.
Letters of Credit
Afraid of losing the deal, the NIB convinced Eland International Thailand/Ghana to pay huge sums of money to have the maturity dates on the three (3) Promissory Notes (PNs) extended to full two years instead of the half yearly. Here over US$300,000 was charged to Eland International Thailand/Ghana account with the bank agreeing to remit US$1,250,000 to Eland International India but with an unwarranted condition.
Our sources say Eland International Thailand/Ghana was forced to provide an advance counter guarantee from ICIC bank in India that it upon receipt of the amount it would open Letters of Credit (LC) to supply further 25,000 tons of rice.
But the bank per available records, only remitted US$2,450,000 from December 2002 to March 2003 in tranches.
Eland Thailand/Ghana then fell into the trap and shipped 500,000 bags of rice of 50kg to meet the 250,000 tons of rice as demanded by the NIB.
Upon receiving the goods, the NIB, according to inside sources, sprang another surprise by allegedly refusing to issue the Promissory Notes (PNs) for the rice company to use as bank credit lines.
The NIB we are told complained that their warehouses needed repairs as they were leaking badly.
With the vessel about to arrive (the biggest single shipment ever), Eland Thailand/Ghana was forced to get into a warehousing and sales agreement with GNPA. However, when the rice was safely put into the GNPA warehouses, the NIB stepped in to supervise and control the sales and credits.
This resulted in a litigation between the GNPA and Eland Thailand/Ghana of which the NIB refused to be a part of having failed to carry out its contractual obligations.
OAB & Sons battles NIB
The MD of NIB, Mr. Daniel Charles Gyimah was in the process, sued by OAB and Sons for not honouring his words of selling the rice to them on credit terms as prices cheaper than the prices on the Thailand local market after having allegedly advanced some money to him.
Since OAB and Sons, according to available records, was indebted to Eland Thailand/Ghana based on an earlier transaction, the rice company refused to supply them with anymore rice. This compelled OAB and Sons to issue two post-dated checks worth about 32.1billion old Cedis which was guaranteed for payment on the due dates and took approximately 72,000 bags of rice in return.
When Eland Thailand/Ghana presented the cheques in their NIB Escrow Account, to their utter dismay, they were neither credited to their account nor returned to them for being dishonoured to enable them take legal action against OAB and Sons.
According to inside sources, Eland Thailand/Ghana not happy with the way and manner they were being treated and through their lawyers, M/S Justking and Associates, wrote to the NIB but not action was taken. Till date, that amount allegedly still remains unpaid.
Having waited for three and half years with no signs of recovering their full investment, Eland Thailand confronted the NIB where they were told that they were facing some liquidity challenges and the only way for them to get some of their money back supplies was to help raise funds for the bank.
As desperate as the rice company was, having been chased by their suppliers, they were able to raise US$17.6million against two years Promissory Notes issues by the NIB itself for US$24million.
This amount was received by the NIB in their account with Ghana International Bank, London in September 2005.
But to their surprise, the NIB released only a paltry sum of US$7.3million from their escrow account to them. The balance of US$10.3million still remains outstanding till date.
Still confronted with liquidity challenges, the NIB again engaged Eland International Thailand/Ghana for support where an amount of US$45.8million was raised to make the bank financially viable. The said amount was received by NIB into its accounts with the Ghana International Bank, London, in May 2007.
Having had enough cash flow, the NIB remitted US$18.5million in May with the remaining amount still unpaid.
40 Promissory Notes
Eland Thailand then threatened legal action against the NIB but were told the bank could not raise more funds till they pay off the Promissory Notes of US$60million in 2009. However, Eland Thailand told the NIB that it couldn’t wait for that long a period, compelling the NIB to pledge issuing 40 more Promissory Notes of US$5million each totaling US$200million payable in May 2013 inclusive of advance interest.
Those PNs have not been presented to Eland Thailand/Ghana till date.
Having enough of NIB’s alleged machinations and being harassed by its suppliers and lenders for non-payment, Eland Thailand sued (OCC/28/2014) the NIB for US$107million with interest up to only April 2011 at the Fast Track High Court in Accra in 2014.
The amount was only for CIF value of the goods supplied to NIB under the CMA. Eland Ghana, the local distributor of the goods did not claim its 62% of the duties, taxes and other expenses in the said suit which together exceeded US$200million.
At this point, the NIB wanted to enjoin Eland Ghana as a co-defendant in the case but the court did not allow it. NIB went to the Appeals Court to appeal against the ruling but the lost it.
Thereafter, they made Eland Ghana a third party, a motion was moved for the case to be heard and Eland International Thailand won.
After back and forth arguments at the courts, a request was made by NIB for the matter to be settled out of court.
Eland International Thailand in 2016 then requested the matter be referred to Arbitration in London.
Notices of arbitration starting in London were issued but the NIB consistently maintained either silence or gave contradictory replies.
Lawyers for the NIB, we are told, have invited Eland International Thailand through their lawyers to settle the matter amicably, compelling the arbitration proceedings to halt for some time.
But the NIB we are told, has since recoiled into its shelve and maintained its silence over the matter after kicking against the arbitration in London.
This situation has therefore provoked Eland International Thailand to trigger the arbitration proceedings with the hope of claiming its US$207.5million with interest.
To be continued …