When the National Investment Bank (NIB) faced liquidity challenges in the early 2000s and was about to be sold off, it was Eland Thailand and its sister company in Ghana, Eland Ghana, that saved it.
The state banking firm needed US$2million to survive. Fortunately, the bank got more than what it had hoped for through a trading business it entered into with Eland Thailand and its Ghanaian partner, Eland Ghana.
Goods worth about US$13million was placed at its doorsteps to trade with after signing Collateral Management Agreement (CMA) with Eland International Thailand/Ghana.
All that the bank needed to do was to store the goods at its various warehouses, look for buyers and sell to them and take its cut while the remaining amount is deposited into Eland Thailand’s accounts.
To ensure fairness and transparency, an escrow accounts was opened at NIB for such special purpose trading business.
Saving NIB from collapse
This breakthrough deal was secured by the bank through the assistance of Mr. Daniel Charles Gyimah, who had then been appointed at the Managing Director of NIB.
Mr. Daniel Charles Gyimah until his appointment at MD for NIB was the MD for EXIM Guarantee Company, a company which was also doing business with Eland International Thailand/Ghana.
It all started when in the year 2000, Eland Thailand/Ghana entered into a rice supply agreement of about 14,400 tons at a CIF value of US$5million with Network Trading Company (NTC) on a credit of two years.
NTC was being managed by Prosper Adabla, Sam Adabla and Edward Boahene. The company had a Collateral Management Agreement (CMA) with EXIM Guarantee Company of which Mr. Daniel Charles Gyimah was the MD. Mr. Daniel Charles Gyimah and Mr. Prosper Adabla were very close friends.
They issued four (4) Promissory Notes (PNs) worth US$1,250,000 with each payable after each six (6) months.
This business transaction was counter guaranteed by GR World, a credit insurance guarantee company which covered the risk of default to EXIM Guarantee Company.
Breaking new grounds
While Eland Thailand/Ghana was working on the risk and supply documentations, they were informed that Mr. Daniel Charles Gyimah had been appointed as MD for NIB and therefore, have moved the CMA to NIB.
Eland International Thailand/Ghana had no difficulty agreeing to the said transfer of business to NIB since the risk was more acceptable on the face of it to their bankers and or fund managers.
Since NIB wasn’t on a sound footing financially, it incorporated a clause in the CMA that the funds for clearing the goods and all local expenses would be paid by the suppliers out of which same would be recovered from the sales and repaid to Eland Thailand/Ghana.
A credit guarantee premium and expenses of £395,000 would also be paid by the supplier (Eland Thailand/Ghana) and repaid from the sales proceeds.
Industry sources with knowledge about the said business transaction say since the investment was heavy, Eland Thailand/Ghana requested for some time to seek the approval from its bankers.
However, NIB took board approval and issued four Promissory Notes (PNs) on the same terms as EXIM Guarantee Company and guaranteed them. It then insisted that Eland Thailand/Ghana shift its business from their bankers to NIB with a promise to render better services and charge less for under the CMA.
Eland International Thailand/Ghana which then had a vision to expand its business across all ECOWAS member countries at a little cost agreed to the terms being offered by the NIB and therefore entered into a Collateral Management Agreement (CMA) with NIB on November 10, 2001 for a period of ten (10) years.
Having sealed the deal, it was time for their first transaction. Here, the NIB did not issue or guarantee any Promissory Notes (PNs) for Eland Thailand/Ghana. Eland International Thailand/Ghana paid £395,000 to GR World for credit guarantee for NIB and NTC following which the NIB raised an invoice of US$109,600 for the CMA of both companies in January 2002.
Eland International Thailand/Ghana thus shipped 22,000 tons of Thai White Rice 25% broken in 50kg by a chartered vessel MV Sea maiden which arrived at the Tema Harbour in the last and early week of February/March 2002.
However, what appeared to a promising and healthy relationship betwee