The CEO of K-Ofori Limited and Kwadwo Boachie Enterprise has been cleared of all charges in a suspected tax evasion and money laundering case.

This follows almost two years of investigations by the Economic and Organised Crime Office (EOCO), with assistance from the Attorney-General’s Office and the Ministry of Justice.

The Director of Public Prosecutions (DPP), Yvonne Atakora Obuobisa, advised the Attorney-General to drop the case against Frank Kwadwo Ofori, the CEO of K-Ofori Limited and a 10% shareholder of Universal Steel Company (USC) Limited, a company at the centre of tax evasion allegations.

“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 instruction was based on a request by the EOCO’s Executive Director, Commissioner of Police (COP) Maame Yaa Tiwaa Addo-Danquah, to undertake a forensic audit on the activities of USC, which is run by foreigners.

When contacted, Anthony Forson Jnr, Lead Consultant, T. Forson & Co., praised the Attorney-General’s office and EOCO for the comprehensive inquiry that resulted in Mr Ofori’s exoneration.

Background 

According to the investigation’s terms of reference, suspects Ofori, Hani Mikati, Marwa Hamwi, and Sallam Mohammed Gharib were detained as people behind USC.

They each rejected the charges of tax evasion, money laundering, and participation in organised crime in their cautionary statements.

EOCO’s investigation revealed that USC’s company registration documents obtained from the Office of the Registrar of Companies revealed that the company began operations 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 revealed that since 2016, Frank Kwadwo Ofori and his wife Akosua Aboagye Ofori controlled 10% of the shares in USC, while Sethi Brothers owned 30%.

Following a review of K-Ofori Company Ltd’s bank records for the year 2019, the report said that no bogus banking activity were detected, adding, “All transfers from K-Ofori Ltd were linked to USC and its agents and affiliates.”

According to the report, the bank was also unable to furnish the EOCO team with any information on USC’s accounts upon request.

According to the bank accounts of the three foreign suspects, Marwan Hamwi took a total of GH5 million from the company’s account, but the inquiry could not reach a conclusion as to why the cash was removed or what it was used for.

DHL Ghana Limited credited Abdul Majid Mikati’s account with GH5.9 million, according to the report. The inquiries did not reveal the reason for the crediting of these funds to his account.

“A total of GH5.8 million had been credited to Salem Gharib’s Zenith Bank account without justification.”

“From the beginning, USC did not keep any financial records on which the investigation team could rely to determine 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),” according to the probe.

Again, the investigation discovered that the company was duly registered with the Social Security and National Insurance Trust (SSNIT) and the Ghana Revenue Authority (GRA) and owed SSNIT GH91,990.73 for the months of November and December 2018, as well as owing GRA GH684.81 million, exclusive of penalties, as of June 2021.

The total includes customs charges, corporate income tax, Value Added Tax (VAT), wage and salary income tax, often 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 findings of the inquiry showed.

No evidence

The Attorney-General and Minister of Justice decided in their advice that there was no proof of money transferring directly from USC to Kwadwo Boachie Enterprise since all transactions between them were cash-based.

Since investigations were still underway, the A-G suggested that they be completed and a complete docket given to the A-G’s office for comments on the guilt or otherwise of any of the suspects in issue.

“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. 

As a result, she determined that Mr Ofori could not be held accountable for any of the charges levelled against him, adding, “I therefore disrecommend his prosecution.”