The Labianca Company Limited, which is controlled by Ms. Eunice Jacqueline Buah Asomah-Hinneh, a member of the Council of State, was fined GH1.074 million by the Office of the Special Prosecutor (OSP).
The sum is what the company that makes frozen goods owes the state for import tariffs that were not paid.
In an investigative report, a copy of which was obtained by Graphic Online, the OSP charged Ms. Asomah-Hinneh with engaging in influence-peddling for allegedly using her roles as a member of the Council of State and a board member of the Ghana Ports and Harbours Authority (GPHA) to obtain a favorable ruling from the Customs Division of the Ghana Revenue Authority (GRA), which reduced Labianca Limited’s tax obligations.
A form of corruption known as “influence-peddling” or “influence dealing” occurs when a person utilizes their position or political clout to secure unjustified favors.
According to Emmanuel Ebo Hawkson of Graphic Online, the OSP criticized Joseph Adu Kyei, a deputy commissioner of customs in charge of operations, for issuing an unlawful customs advance ruling that decreased the benchmark values of the frozen foods imported by Labianca Limited and reduced the company’s tax obligations to the state.
“According to the report, which was signed by the Special Prosecutor, Kissi Agyebeng, “the OSP finds that there is strong evidence to suggest that Mr. Kyei’s decision to issue a customs advance ruling for the applicant was procured through influence peddling or trading of influence by Ms. Asomah-Hinneh by employing her position as a member of the Council of State and member of the Board of Directors of the GPHA.”
The title of the investigation’s report, dated August 3, 2022, is: “Report of Investigation into Alleged Corruption and Related Offenses Involving the Labianca Group of Companies and the Ghana Revenue Authority’s Customs Division.
Nothing is wrong
However, Ms. Eunice Jacqueline Buah Asomah-Hinneh has denied any wrongdoing and informed Graphic Online that she was unaware of the OSP report or its conclusions and would speak to it after she had learned the details from the Labianca Company Limited management.
“I am unable to comment since I have not seen the Special Prosecutor’s findings. I’m not even aware that the report is available “I told Graphic Online, she said.
She gave a positive response when asked if she was aware of any OSP inquiries into her business.
When asked if she knew if the Special Prosecutor had ordered Labianca Company Limited to send the money to the government, she responded that the company’s management typically dealt with those matters and she might not be immediately aware of any such payments as she hadn’t been there.
“I haven’t been around, but the office is, so I’ll phone and inquire next Monday or Tuesday. She continued, “I’ll ask them since it’s management.”
When she got back to Accra, she said she was willing to give Graphic Online a thorough interview.
Ms. Asomah-Hinneh was chosen to serve the Western Region as a member of the Council of State for a second term in 2021.
From 2017 until 2021, she served on the GPHA Board of Directors.
In response to a petition submitted by a man named Frank Asare on November 16, 2021, in accordance with Section 27(1) of the OSP Act, 2017, the OSP began an investigation into Labianca Company Limited and the Customs Division (Act 959).
In the petition, Mr. Asare accused Labianca Company Limited and the GRA’s Customs Division of taking part in an allegedly corrupt transaction where the imports made by Labianca were exempt from paying the necessary taxes.
In response to the petition, Etse Gadegbeku, the managing director of Labianca Company Limited, told Asaase Radio in November 2021 that it was simply an attempt by Labianca’s rivals to harm the company’s and its owner, Ms. Asomah-Hinneh,’ reputation.
“We work in a highly competitive market, and we firmly believe that our rivals are using these dishonest strategies to damage the reputation of the business and its CEO, Eunice Buah Asomah-Hinneh, in order to gain an advantage during the busy Christmas season.
“The accusations of corruption and import duty avoidance are categorically denied by us. Before the discount was granted, Labianca went through all the required legal and proper application processes “Mr. Gadegbeku remarked,
The Special Prosecutor ordered Labianca to pay the state the shortfall of GH1.074 million on March 21, 2022 after the OSP’s findings revealed that the Customs Division of the GRA had illegally reduced the benchmark values.
Labianca followed the Special Prosecutor’s instruction and transferred the funds on March 31, 2022, into the OSP’s Asset Recovery Account.
Advance Integrity Plan for Customs
The Special Prosecutor ordered the Commissioner-General of the GRA to present an integrity plan on customs advance ruling made by the Customs Division to the OSP by December 31, 2022, in addition to recovering the tax shortfall from Labianca.
This is done to prevent corruption among Customs Division employees who exercise discretion, particularly when making decisions “said the report.
The Special Prosecutor then instructed his team to launch more extensive investigations into all customs advance judgements issued by the GRA’s Customs Division between July 2017 and December 2021 as a result of the findings.
The OSP concluded that even though Colonel Kwadwo Damoah (retired), Commissioner of the Customs Division, was not directly accountable for the improper customs advance ruling, he could not be “absolved of the ultimate responsibility for the apparently contrived decision” because he gave Mr. Kyei’s action his approval.
Once more, the OP claimed that Mr. Kyei’s action and Col. Damoah’s approval were a clear warning of institutionalized disregard to stop improper behavior at the Customs Division, a situation which it claimed was present in this case “shows a high propensity to encourage corruption and activities related to corruption advance customs ruling According to Section 12 of the Customs Act, 2015 (Act 891), the GRA’s Customs Division may issue a customs advance decision in response to an application from an entity, providing an interpretation or application of the customs rules or regulations in regard to a transaction by that business.
Advance judgements from customs can have an impact on duties, classification, origin, benchmark values of commodities, and any other activity covered by customs regulations.
In the course of its inquiries, the OSP discovered that although Labianca began operations in 2014, the company only began applying to the Customs Division of the GRA for a reduction in benchmark values in 2017. This coincidentally occurred around the time Ms. Asomah-kinneh was elected to serve as the Western Regional representative on the Council of State and was also appointed a member of the GPHA board.
“It would seem that the appointments of Ms. Asomah-Hinneh to public office and the coincidence of the aforementioned applications were not entirely coincidental. According to the Special Prosecutor, there is compelling evidence that the events are the result of influence peddling.
According to the document, one substantial application was made on April 6, 2021, which was two months after Mr. Kyei was named Deputy Commissioner of Customs.
According to the application, Labianca wanted to reduce the benchmark values of its imported frozen meals by 50% to 60%, but Mr. Kyei rejected that request.
The OSP noted that it was unusual that Mr. Kyei issued a customs advance ruling to lower the benchmark values of the products imported by Labianca to between five and ten percent after rejecting the application.
According to the newspaper, “Mr. Kyei said that he based his judgment on correct procedure, being a letter dated 6th February, 2018 written by Isaac Crentsil, a former Commissioner of the Customs Division, and that his decision prevented the state from losing money.
It further stated that Mr. Kyei also argued that his choice to lower the applicant’s benchmark values was supported by the World Customs Organization’s June 2012 practical instructions for valuation control, notably pages 22 and 23.
The OSP’s findings state that Labianca’s application did not meet the criteria for advance rulings in customs set forth in Section 12 of Act 891, yet Mr. Kyei nevertheless issued the ruling, resulting in lesser tax payments from Labianca.
“The law’s conditions for the issuance of customs advance rulings did not support Mr. Kyei’s improper advance ruling determination. By following his own preferences, Mr. Kyei willfully disregarded the law, the Special Prosecutor continued.
Attached below is a full copy of the report