The banks that are owed by the Produce Buying Company (PBC) will definitely struggle in their operations because they will not be able to recover the money owed by the PBC, General Secretary of the Ghana Agricultural Workers Union, Mr Edward Kareweh, has said.
Edward Kareweh cast doubt on the ability of the banks to recover the debts merely by disposing of the assets of the company.
Mr Kwreeh stated that the assets of PBC are not enough to pay for the over $ 300 million debts owned by the PBC to the banks.
PBC since last year, has been struggling to secure funds for the purchase of cocoa beans due to its current debt. The debts made it difficult to carry out any financial transaction through commercial banks.
Mr Kareweh cited mismanagement and corruption as the causes of the challenges of the company and further criticized the government for allowing the company to be mismanaged, leading to its collapse.
“We are aware that many state institutions are not performing, they are not making profits and PBC is one of them where the state has folded its hands and there is so much corruption, there is mismanagement to the extent that labour force has to reduce and now that we have legal action taken and judgment given for the assets of the company to be disposed of to meet loan obligations by statement institutions. For instance, GCB, is a state institution, ADB is a state institution, Cal Bank is Ghanaian-owned, UMB is also a Ghanaian owned and the others as well.
“The real effect of what is happening at PBC goes beyond PBC to affect all these banks. I am telling you that even though they have got the judgment to dispose of the properties of PBC to pay for their loans, at the close of the day it is clear that the over 300 million dollars that PBC owes cannot be paid, the assets of PBC will not be able to meet that cost. Those banks will eventually run into losses, they will not be able to recover all the loans of PBC and they will be contained to function as desired by all of us.”
Background
The Agricultural Development Bank (ADB) and five other banks had secured a court order to prevent any sale or transfer of assets of PBC Limited, including its headquarters at Dzorwulu Junction in Accra.
This follows a judgment secured by the six banks against PBC Limited. The other five banks include Cal Bank, Bank of Africa, GCB, Universal Merchant Bank, and United Bank of Africa.
This was after it secured a court order to sell some of the company’s assets over nonpayment of debt running into more than GH¢300 million.
The assets include vehicles and some equipment. The banks include Agricultural Development Bank, GCB Bank, Bank of Africa, CalBank, UMB and UBA Ghana.
The financial institutions applied for summary judgement on October 9, 2023, under order 14 of C.I 47 against the defendant, PBC.
In respect of the 1st Plaintiff (ADB Bank), the licensed buying cocoa company is expected to pay GH¢49.257 million. PBC is also expected to pay GH¢11.219 million, GH¢71.049 million, GH¢108.469 million, GH¢42.295 million and GH¢13.728 million to Bank of Africa Ghana, CalBank, GCB Bank, UMB and UBA Bank respectively.
The attachment order was issued by the Chief Justice, Gertrude Torkonoo, to have the company honour its debt obligations to the six banks.