US Group of Companies Ordered To Pay Investors GH¢1,168,000
Investors in the tilapia business of the US Group of Companies walked out of the Accra Fast Track High Court yesterday full of smiles, following a default judgement of GH¢1,167,928 awarded in their favour.
The court, presided over by Mr Justice Daniel Mensah, also slapped the company with GH¢116,000 costs in the case in which the 21 customers and clients of the company initiated an action at the court for the recovery of the company’s indebtedness to them. The court, however, struck out their demand for damages for breach of contract.
Case for default judgement
Making a case for default judgement, counsel for the plaintiffs, Ms Mary Ohenewa Afful, said although a search at the court’s registry indicated that the company had been served the writ on January 10, 2014, after it had been filed on December 18, 2013, the company failed to enter appearance.
A few minutes after taking his seat, Justice Mensah pronounced judgement, ordering the company to pay the plaintiffs GH¢1,167,928 as debts owed them, in addition to interest at the agreed default rate of four per cent per month. That aside, the company was also ordered to pay GH¢116,000 as costs.
With the case going their way, the investors, who sat together throughout the proceeding, appeared to have suppressed their joy but celebrated their triumph by shaking hands with one another outside the courtroom.
A man who was said to be a lawyer for the company appeared on the scene immediately the plaintiffs stepped out and told Ms Afful that the judgement would be set aside.
Facts of the case
In their statement of claim, the plaintiffs, led by an Accra businessman, Mr Alexander Obuobi, said acting on the strength of the defendant’s representation and personal assurances of re-payment with exorbitant interests, they, on or about January 2012, invested money in defendant’s company and provided all the necessary documentation to the defendant personally to enable them to profit from their various investments.
It said it was expressly agreed or alternatively implied by the course of dealings between the parties that the defendant shall take steps to pay plaintiffs proceeds after the harvesting period and also after the duration of the loan agreement, either in bulk or individually.
Unfortunately, however, the plaintiffs said the defendant had made no effort to settle its outstanding liability, it averred. According to the statement, by the terms of the agreement, the cost of a full cage was GH¢6,000 and that covered the construction of the cage and stocking it with 6,000 fingerlings of tilapia.
It said the cost of feeding for the first 12 months was GH¢7,020 at the current feeding fee of GH¢780 per month, adding up to a cost of GH13,020. The amount covered the maintenance and any other matters related to the cage and its content.
It said for the subsequent nine years, the investor would be subjected to feeding payments only, for which the cost would be communicated at the beginning of each period, which currently stands at GH¢780 per month.
According to the statement, after the first 12 months, harvesting would take place every six months, meaning that investors would get double the total amount they got in the first year.
It said by the terms of the investment contract with defendant, it was agreed that plaintiffs shall enjoy interest of between 96 and 120 per cent for between six and 12 months and a four per cent default interest per month on any amount outstanding.
According to the statement, when the dates for redeeming plaintiffs’ investments were due, neither their investment proceeds nor their principal was paid to them and had been so to date.
The defendant, it added, had, therefore, failed, ignored, neglected and/or refused to pay the amount owed plaintiffs as of this date. It said the cheques the defendant issued to the plaintiffs all bounced at the counter.
It contended that although the defendant company remained indebted to the plaintiffs, it continued to hold itself out as a successful and profitable business entity opening supposed branches countrywide.