Republic of Ghana

Oil and Gas Capacity Building Project

               Redacted Report



                          November 2020
                                Statement of Use and Limitations

This strictly confidential report (the Report) was prepared by the World Bank Group (the “WBG”)
Integrity Vice Presidency (“INT”). It provides the findings of an INT administrative inquiry (the
“Investigation”) into allegations of corrupt, fraudulent, collusive, and/or coercive practices, as
defined by the WBG for the purposes of its own policies, rules and procedures (the “WBG’s Anti-
corruption Framework”), in relation to WBG-supported activities. The purpose of the
Investigation was to allow the WBG to determine if the WBG’s Anti-corruption Framework had
been violated.

This Report is being shared to ensure that its recipients are aware of the results of the INT
Investigation. However, in view of the specific and limited purpose of the Investigation underlying
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Background

In April 2011, the International Development Association and the Republic of Ghana entered into
a US Dollars (“US$”) 38 million Financing Agreement for the Oil and Gas Capacity Building
Project (the “Project”) in Ghana.

The Project aims to support the Republic of Ghana’s efforts to (i) improve management and
regulatory capacity while enhancing transparency, and (ii) strengthen local technical skills in its
emerging oil and gas sector. The Project closed on December 31, 2017.

A consortium of Company A and Company B (collectively, the “Consortium”), both companies
registered in India, bid for a total of eight Project-financed contracts, and was awarded six of them.1
Company A, not the Consortium, signed all six contracts in its individual capacity.2

First, in January 2013, the Consortium bid for four Lots for the Procurement of Petroleum
Laboratory Goods & Equipment for Kwame Nkrumah University of Science and Technology
(“KNUST”). Based on these bids, the Consortium was awarded three contracts, for Lots 2, 4, and
7. Company A signed the three contracts in April 2013.

Next, in July 2013, the Consortium bid for four Lots for the Procurement of Goods and Equipment
for Oil and Gas Technical Capacity Building in Selected Technical Training Institutions
(“COTVET”). Based on these bids, the Consortium was awarded three contracts, for Lots 1, 2 and
4. Company A signed contracts for Lots 1 and 4 in November 2013; and signed the contract for
Lot 2 in December 2013.

Allegations

In January 2014, INT received an anonymous complaint alleging that Company A had submitted
fraudulent Manufacturer’s Authorization Letters (“MALs”) with its KNUST and COTVET bids,
and that it had paid kickbacks in exchange for the award of Project contracts.




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  Company A and Company B are ostensibly independent companies. However, evidence indicates that Company
A’s Managing Director and Company B’s Chairman and Managing Director are father and son. Further evidence
indicates that Company A’s Managing Director owns shares in Company B and is a member of the Board of
Directors of Company B. Evidence also indicates that Company A and Company B share the same office address
and office space.
2
 Evidence suggests that Company B’s participation in the Consortium was necessary because Company A did not
qualify for the contracts on its own. Evidence suggests that Company A was solely responsible for the bidding
documents.

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Findings

   1. Evidence indicates that Company A submitted fraudulent MALs with its KNUST and
      COTVET Bids.

Bidders for goods contracts, such as those procured in the KNUST and COTVET tenders, must
submit MALs to establish that they are duly authorized by the manufacturer or producer to supply
the sought goods in the procuring country.

Evidence indicates that Company A submitted three forged MALs with its KNUST bids.
Specifically, evidence indicates that the claimed manufacturers did not issue the three MALs to
Company A; evidence indicates that, of these three MALs, at least two were inaccurately imitative
documents, signed by individuals never employed by the manufacturers.

Evidence indicates that Company A also submitted a forged MAL with its COTVET bids.
Specifically, evidence indicates that the claimed manufacturer did not issue the MAL.

   2. Evidence indicates that Company A retained an undisclosed agent, making several high-
      value payments to that agent in relation to Project contracts and concealing those
      payments with fraudulent invoices.

Evidence indicates that Company A had an agency agreement with an individual (the “Agent”),
which was signed in April 2013. Evidence indicates that Company A agreed to pay the Agent a
commission equal to 0.77 percent of the net KNUST Lot 2 Free on Board (“FOB”) value to act as
Company A’s agent during the KNUST tender and contract execution.

Evidence indicates that: (i) Company A made several high value payments, exceeding the agency
agreement commission, to the Agent in connection with both the KNUST and COTVET contracts;
(ii) Company A tried to conceal either the purpose or the recipient of these payments in its books
and records; (iii) these payments to the Agent were exact percentages of Company A’s Project
contract values; and (iv) these payments were made close in time to Company A’s receipt of
KNUST and COTVET contract advance payments.

May 2013: Evidence indicates that, in May 2013, the Agent billed Company A for US$ 71,768.19
for approximately US$ 2,800,000.00, purportedly for work unrelated to KNUST and COTVET.

However, evidence indicates that Company A’s corresponding wire transfer to the Agent’s bank
account identified the payment as an agency commission for the KNUST contracts. Evidence
indicates that the payment amount was equal to exactly 3% of the FOB value of Company A’s
three KNUST contracts. Further, evidence indicates that the payment was made shortly after
Company A received the KNUST contracts’ advance payments.

December 2013: Evidence suggests that Company A used a fraudulent invoice from a company
(“Company C”) to conceal a high value payment to the Agent. Evidence indicates that the invoice
purportedly was issued by Company C for approximately US$ 101,300 for logistical services for
goods supplied under the COTVET Lots 1 and 4 contracts. However, other evidence, including

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Company A’s own account records, suggest that the US$ 101,300 payment was made to the Agent,
not Company A.

Evidence indicates that the payment was exactly 5% of the FOB value of the COTVET Lots 1 and
4 contracts. Further, evidence indicates that the payment was made on the same day that Company
A received its 10% advance payment under the contracts.

January 2014: Evidence suggests that Company A used a fraudulent invoice from a logistics
company (“Company D”) to conceal a high-value payment to the Agent. Evidence indicates that
the invoice was purportedly issued by Company D for approximately US$ 137,000, for logistical
services for goods supplied under the KNUST contracts. Evidence indicates that the invoice
included both Company D’s bank account information and the Agent’s bank account information.
Evidence indicates that, in January 2014, Company A wired approximately US$ 137,000 into the
Agent’s bank account.

Evidence indicates that the payment was exactly 5% of the FOB value of Company A’s COTVET
Lot 2 contract. Evidence indicates that the payment was made one day after Company A received
its advance payment for the COTVET Lot 2 contract.

   3. Evidence suggests that Company A received information relating to the COTVET
      tender in advance of its official publication.

Company A claimed to have learned about the COTVET Tender when it was published in June
2013. Evidence indicates, however, that Company A had information regarding the COTVET
tender prior to the date that the tender published. Specifically, evidence indicates that, in April
2013, Company A requested quotes from at least two suppliers, attaching a copy of the technical
specifications for COTVET Lots 2 and 4. Further, its agency agreement with the Agent, signed in
April 2013, referenced a description of COTVET Lot 2.

Corrective Actions

The World Bank imposed the sanction of debarment with conditional release on Company A and
the sanction of debarment on Company A’s Managing Director. These sanctions extend to any
entity Company A or its Managing Director directly or indirectly control.




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