On 16 November 2021, the Office of the Special Prosecutor (hereafter, OSP) received a written complaint from Frank Asare against Labianca Group of Companies and its subsidiaries (hereafter, Labianca) and the Customs Division of the Ghana Revenue Authority (hereafter, Customs Division).
The complainant alleged ongoing corrupt, illegal and questionable dealings between Labianca and the Customs Division resulting in unlawful markdown or reduction of benchmark values of frozen food products imported by Labianca under the guise of customs advance rulings. This is because the beneficial owner and Chief Executive of Labianca, Ms Eunice Jacqueline Buah Asomah-Hinneh engages her influence as a member of the council of state and member of the board of directors of the Ghana Ports and Harbours Authority.
These unlawful benefits gave her an undue market advantage over competitors. The same was secured for supposed subsidiaries of Labianca – Rafano Frozen Foods Company Limited and Yoba Capital Limited. The Office of the Special Prosecutor proceeded to investigate the complaints in accordance with regulation 5 of the Office of the Special Prosecutor (Operations) Regulations, 2018 (L.I. 2374).
Labianca, being the main subject of the investigation, was directed to submit the following documents covering the period 2017 – 2021 in accordance with section 29 of the Office of the Special Prosecutor Act, 2017 (Act 959) and regulation 10 of L.I. 2374: i. Mode of payment for consignments (including Transfers and SWIFT) – to ascertain actual payments to suppliers ii. Sales contracts – to verify descriptions of products from suppliers abroad iii. Original invoices – to ascertain pricing of products and INCOTERMS iv. Bills of lading – for crosschecking with shipping lines v. Sales books – to ascertain quantity and description of products sold vi. Applications for customs advance ruling with attachments and annexures – to ascertain declared values and the basis for the grant by the Customs Division of markdown on benchmark values vii. List of all consignments to be cleared – to prevent subsequent clearance and assure markup of values where necessary viii. Details of company registration and that of subsidiaries (if any) – to detect the clearance of consignments through other persons, natural and juridical ix. Annual Tax Returns filed at the Domestic Tax Revenue Division of the Ghana Revenue Authority x. List of company assets xi. Record of employees xii. Declaration of property and income of officers of the company.
The investigation found the Deputy Commissioner for Customs, Mr. Joseph Adu Kyei, as the officer who worked with the Council of State member to reduce the value of imports leading to the loss of revenue to the state.
“Mr. Adu Kyei’s decision to render an advance ruling to the applicants by reducing the values of their intended imports between a range of 5% – 10% below the benchmark values was wrongful and unsupported by the requirements of the law for the issuance of customs advance ruling. Mr. Adu Kyei wilfully put aside the law by embarking on his own predilections.
“The OSP finds, that Mr. Adu Kyei’s decision to issue customs advance ruling to the applicants, resulted in a short collection or shortfall in revenue in the amount of One Million Seventy-Four Thousand cedis Six Hundred and Twenty- Seven cedis Fifteeen pesewas (GHC1,074,627.15) from a total of five hundred and thirty-one (531) declarations in respect of Labianca. Therefore, it lies ill in Mr. Adu Kyei’s mouth to claim that he saved the Republic financial loss by his conduct; and his claimed bases for his decision are unsupportable afterthought,” the report said.
