The High Court, Criminal Division, will on October 12, 2022, hear the case in which the Chief Executive Officer (CEO) of Danadams Pharmaceuticals Industry (Ghana) Ltd, Dr Yaw Adu-Gyamfi, is facing five criminal charges, including issuing forged documents, defrauding by false pretences, and money laundering.
The charges emanate from a 2013 loan facility the ECOWAS Bank for Investment and Development (EBID) granted Dr Adu-Gyamfi and his company.
While, Dr Adu-Gyamfi, has admitted to defaulting in his obligations to the terms of the loan, he has denied the criminal charges and described his prosecution as calculated attempts to frustrate and tarnish his reputation.
The bank in a related civil case, appear set to execute a Fi Fa order granted it by the High Court, Commercial Division against Danadams and its CEO, which action may see the former President of the Association of Ghana Industries lose properties including the Danpong Medical Centre and Head Office of Danpong Health Group located at the Spintex Road and at Baatsona near Tema, which were allegedly used as mortgages to partly secure the said loan.
Court documents on the matter indicate that EBID approved a loan facility of US$9,417,600.00, to Danadams in May 2013, to enable the company produce anti-retrovirus drugs for HIV/AIDS patients in the ECOWAS region.
Under the terms of the facility, Danadam, was required to open an escrow account with a reputable bank in Ghana to be funded with an agreed amount as a condition precedent for EBID’s disbursement of the facility.
Dr Adu Gyamfi, allegedly subsequently submitted a letter purported to have been issued by the Royal Bank of Ghana, advising EBID of the opening of the escrow account and the funding of same with an amount of US$340,000.00.
EBID, based on the claims and other alleged representations by Danadams and its CEO, consequently disbursed part of the loan facility to Danadams amounting to the sum of $6,020,840.00.
However, a further probe by EBID of the letter allegedly submitted by Dr Adu Gyamfi, found it was forged, as The Royal Bank only acknowledged opening the escrow account upon Dr Adu-Gyamfi’s request, but denied any knowledge of the account being funded or the letter allegedly making that claim.
EBID also claims that its further probe showed that the disbursed loan was misapplied, allegedly, contrary to the terms of the facility.
Meanwhile, EBID said its persistent calls on Dr Adu-Gyamfi and Danadams to repay the loan fell on deaf ears, leading later to a total judgment debt of US$8,546,692.00 in 2020, and the subsequent Fi Fa order.
The CEO of Danadams Pharmaceuticals Industry (Ghana) Limited, Dr Yaw Adu-Gyamfi, is at the Criminal Court in Accra over alleged fraud and forgery in his dealings with the ECOWAS Bank for Investment and Development (EBID).
The former President of the Association of Ghana Industries (AGI) is also set to lose his properties including the Danpong Medical Centre and Head Office of Danpong Health Group among others.
According to court documents, Danadams is said to have taken a loan using documents the Bank describes as “forged” as a prerequisite for the facility.
According to the EBID, by a Loan Agreement (No. 0078/AP/LA/BIDC/05/2013) dated 21st May 2013, it approved a loan facility of US$9,417,600.00 to Danadams for the production of anti-retroviral drugs for HIV/AIDS patients in the entire ECOWAS region.
“The loan facility was secured by two legal mortgages dated 4th August 2014, in respect of Dr Yaw Adu Gyamfi’s properties he made available to EBID for the payment of the principal amount, interest and other charges covenanted to be paid by Danadams to EBID in the event of a default on the loan facility.
“It was also secured by a legal charge created by Danadams in EBID’s favour in respect of equipment alleged by Dr Adu Gyamfi to be purchased by Danadams with the resources of the loan facility from an Indian Supplier.
According to EBID, “It was also an express term of the Loan Agreement that Danadams should open an escrow account with a reputable bank in Ghana to be funded with an amount of US$340,000.00 (representing one maturity in principal and interest) as a condition precedent for EBID’s disbursement of the first tranche of the loan in the sum of $6,020,840.00.
The Bank explained that this was “In order to induce EBID to disburse the first tranche of the loan, Dr Adu Gyamfi delivered to the Bank a letter dated 31st July 2014, purporting to emanate from the Royal Bank of Ghana, advising EBID of the opening of the escrow account and also assuring EBID that the account had been funded with the initial amount of US$340,000.00 as stipulated in the Loan Agreement. (This fraudulent letter is attached as ‘Appendix A’).”
It added, “Dr Adu Gyamfi also delivered to us a horde of official documents, including customs documents, purporting to show that Danadams had pre-financed the purchase of the equipment from the Indian company in the total sum of $6,020,840.00 through swift transfers made through Royal Bank of Ghana.”
“On the basis of the foregoing, and/or acting on the faith of these representations and induced thereby, EBID disbursed the first tranche to Danadams’ account with SG SSB Bank Ltd, Accra, the total sum of $6,020,840.00 on 14th January 2015, which Dr Adu Gyamfi acknowledged by a letter dated 15th April 2015.”
However, EBID said it later came to know that “The letter dated 31st July 2014, which Dr Adu Gyamfi presented to advise EBID about the opening of an escrow account was not issued by the Royal Bank of Ghana as he made us to believe. On the contrary, it was an elaborate forgery he created by cloning Royal Bank’s official stationary and also forging the signatures of the Bank’s officials on it.
“A supervision mission to the Royal Bank of Ghana conducted by EBID officials before disbursement of the second tranche of the facility revealed that even though the escrow account (No.1410310748215) was truly opened by Danadams with the Royal Bank, it was not funded with the sum of $340,000.00. It was during this mission that the Royal Bank delivered to EBID the actual letter they issued to Danadams which was not delivered to EBID.”
According to the Bank, “After the fraud had been detected, the Royal Bank issued a letter dated May 11, 2016, to Dr Adu-Gyamfi disassociating itself from his fraudulent activities and threatening to take legal action to purge their image.
“Swift payments delivered to EBID by Dr Adu Gyamfi as evidence of the purchase of equipment from the Indian Company were elaborate forgeries manufactured by him.”
The EBID further said, “Customs Declaration Forms delivered to EBID by Dr Adu Gyamfi as evidence of the importation of the equipment were fake or forgeries.
“Notwithstanding that he had executed or created a legal mortgage over his properties to secure Danadam’s repayment obligations to EBID, Dr Adu Gyamfi subsequently used the same property to secure Danadam’s repayment obligations to Royal Bank under a different facility in the sum of GH¢7 million from Royal Bank.”
The Bank said Dr Yaw Adu Gyamfi diverted the proceeds of the loan to other purposes other than for the purchase of the equipment, including paying off existing liabilities he and his company owed to SG-SSB Bank and other creditors.
Royal Bank distances itself from support letter
In its defence in a court document the third defendant (The Royal Bank) – now defunct – told the Commercial Division (6) of the High Court in Accra that, “the first defendant (Danadams Pharmaceuticals) acting by the second defendant (Dr Yaw Adu-Gyamfi) approached them for a facility to construct a facility for the production of Anti-Retroviral and Anti-malaria drugs in Ghana.”
Under the terms of the facility, Danadams was expressly required to open an escrow account with a reputable bank in Ghana to be funded with an amount of $340,000 (representing one maturity in principal and interest) as a condition precedent for EBID’s disbursement of the facility.
In order to induce EBID to make disbursement of the loan, Dr Adu Gyamfi allegedly delivered to the Bank a letter dated July 31, 2014, purporting to emanate from the Royal Bank of Ghana, advising EBID of the opening of the escrow account and assuring EBID that the account had been funded with the initial amount of $340,000 as stipulated in the Loan Agreement.
According to the Royal Bank, on May 11, 2016, a delegation from EBID visited it “to enquire about the creation of an escrow account opened in the joint names of the Plaintiff and first defendant.
The Royal Bank “confirmed to the said delegation that indeed at the request of the first defendant, the escrow account has been opened but the same has not been funded. It was at this meeting that the delegation produced a letter dated July 31, 2014, allegedly coming from the third defendant and confirming that the same had been funded in the sum of $340,000.”
It further told the court that “on reading the content of the said letter produced by the delegation from EBID, third defendant noticed that the said letter was completely different in form and content from the one the third defendant wrote to the first defendant in relation to the opening of the escrow account.
“Third defendant avers that indeed the letter was produced by the delegation of EBID purporting to be coming from the third defendant in relation to the escrow account was complete forgery for the following reasons;
“(a) the letterhead on which the said letter was written was a complete forgery as the same was different from the normal letterhead used by the third defendant
(b) the letter written by the third defendant did not include the sentence “in addition, we write to confirm that an amount of $340,000 has been deposited in the Escrow Account Number 1410310310748215
(c) the characters in the terms of font etc are completely different from the ones written by the third defendant
(d) the signatures of the third defendant’s Head of Business Banking and Advisory Services was obviously forged as it is completely different from that of the said official of the third defendant
(e) the letter written by the third defendant to the first defendant was not copied to anybody but the which was produced by the delegation of EBID was actually copied to the President of the Plaintiff.
According to the Royal Bank, “they did not only deny the authorship of the said forged letter to the delegation of the plaintiff but the third defendant also wrote a letter dated 11 May 2016 seeking to know from the first defendant the source of the said letter as the same did not emanate from the third defendant. The said letter was copied to the plaintiff.
“…instead of the first defendant responding to the letter dated 11 May 2016, as aforementioned, the second defendant rather chose to respond by a WhatsApp message in which he referred to the forgery as a mistake and apologised to the third defendant for the wrongdoing.”
The Royal Bank also said apart from the WhatsApp message, “the first defendant also sent their lawyer namely Peter Dadzie” to its offices to “plead with the third defendant not to send to the Plaintiff, the Plaintiff’s copy of the letter aforementioned but this request was turned down.”
The Royal Bank, therefore, was surprised that EBID added it to the suit.
Reaction from Danadams
In documents to the Court 2020 Dr Yaw Adu Agyei Gyamfi “pleaded not guilty to all the charges.”
“A reading of the charge sheetwill confirm that the prosecution itself concedes that the basis of this whole prosecution is a loan agreement which Danadams as a Company secured and has defaulted in paying and that EBID as a bank is only using the criminal prosecution to frustrate and tarnish the hard-earned reputation of Dr Yaw Adu Agyei Gyamfi when at all times material EBID is much aware that the issue is a civil matter.
“It is not in doubt that Danadams Pharmaceuticals Limited secured the loan facility from EBID, it is also not in doubt that there has been a default on the part of Danadams Pharmaceuticals Limited. We wish to state emphatically that Dr Yaw Adu Agyei Gyamfi is innocent of the offences he has been charged with and that his prosecution is only a carefully crafted attempt to tarnish his hard-earned reputation.”
Judicial Service writes to Police Service
On July 12, the Judicial Secretary wrote to the Director General of the Police Legal Directorate asking it to help EBID to start the attachment process as granted in a judgement by the Court.
The Judicial Service explained that this was to “forestall any breach of peace that may arise, it will be greatly appreciated if you could detail armed Policemen to assist the Officers to execute the Writ.”
The Police Legal Directorate in return wrote to the regional Commander to assist EBID to carry out the process of attachment of the first and second defendants’ property.