The government is seeking legal advice to take over the Ayensu Starch Company Limited (ASCO) and revamp its operations.
The Minister of Trade and Industry, Mr Alan John Kwadwo Kyerematen, told Parliament Friday that in anticipation of a smooth takeover by government,the Ministry was negotiating a financial package under the One District One Factory (IDIF) programme to resuscitate the company “to ensure that it achieves its intended purpose of job creation, reducing rural-urban migration and producing an important raw material for the food and beverage sectors and other related industries.”
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He was answering a question by the New Patriotic Party (NPP) Member of Parliament (MP) for Awutu-Senya West, Mr George Andah, kn steps being taken by the Ministry of Trade and Industry to revamp the operations of the ASCO.
The ASCO was established in 2002 with the capacity to process over 22,000 metric onnes of cassava starch per annum.
Read: Government takes over Ayensu Starch Factory from Jospong Company
To meet its objective, the company assisted various farmer-based organisations within its catchment area to produce cassava by providing them with resources (both financial and technical) to ensure sustainable supply of its raw material needs.
It also entered into a two-year off-taker agreement with Guinness Ghana Brewery Limited (GGBL) to supply 14,000 metric tonnes of industrial starch until June, 2015.
Under the agreement, GGBL provided the company with financial and technical
support.
Government’s support
Mr Kyerematen saud the government in August 2016 offered 70 per cent of its shares in the company to Tiberias Company Limited,
a company affiliated to the Jospong Group.
He said Tiberias Company accepted and made an initial payment of $2,269,500 representing 51 per cent of its $4,450,000 obligation as the purchaser, and had made no further payment thereafter.
“The Company has failed or refused to fulfil its obligations under the agreement and has defaulted on all other revised payment schedules. Furthermore, the company has abandoned the factory and left the workers idle and without compensation”, he said.
Mr Kyerematen said in the light of the developments, the,Ministry through the transaction advisors informed the company of
ts decision to take over the company in a letter dated December 20, 2018.
However, he said, in a letter dated January 14, 2019 indicated its refusal to hand over possession to the Ministry although the company had abandoned the factory putting the plant and machinery at risk.
“We are seeking legal advice on the next line of action,to take to restore the company to government ownership”, he said.
Source: Graphic.com.gh