The Commission on Human rights and Administrative Justice (CHRAJ) has cleared the Minister of Finance (MOF), Mr Ken Ofori-Atta, of allegations of conflict of interest in the issuance of some bonds.
The Commission, however, after its investigations of allegations made against the minister by a citizen, Mr Yaw Brogya Genfi, gave wide-ranging directives in relation to the bond issuance processes to ensure transparency and clarity.
After five months of investigations, which included interviews with the parties involved, industry players, transaction advisors, security brokers and the Registrar General., and the review of guidelines, regulations, laws, and other documents, CHRAJ concluded that, “On the basis of the evidence available to the Commission, it has come to the conclusion and therefore holds that the allegations by the complainant that the respondent has contravened Article 284 of the 1992 Constitution by putting himself in a conflict of interest situation in relation to the issuance of the 5-year, 7-year, 10-year and 15-year bonds, have not been substantiated.
The decision was contained in a 140-page document detailing the investigations, analysis and conclusions.
Allegations
On April 25, 2017, Mr Genfi petitioned CHRAJ in a letter titled "Petition to investigate conflict of interest in the recent US$ 2.25 billion bond issued by the Government of Ghana through the Ministry of Finance.”
In his petition, he alleged that, "a number of issues of conflict of interest and lack of transparency have emerged from the bond issuance."
According to him, the bonds were not on the issuance calendar, and that the transaction seemed to have been shrouded in secrecy with the bond processes being limited to one day compared to past processes that were open.
Mr Genfi said one single investor, Franklin Templeton Investment Limited, an American global investment management organisation founded in 1947 purchased 95 per cent of the bond issued.
He insisted that, “a relational interest existed between the Minister of Finance and Mr Trevor G Trefgarne, who in a semi-annual report of the Franklin Templeton Investment Limited of December 31, 2016 is one of the Board of Directors of the organisation, while also being the Chairman of the Enterprise Group Limited.
GRAPHIC ONLINE
CHRAJ clears Finance Minister of Conflict of Interest allegations in bonds deals
CAROLINE BOATENG
28 DECEMBER 2017
Mr Ken Ofori-Atta, Minister of Finance
The Commission on Human rights and Administrative Justice (CHRAJ) has cleared the Minister of Finance (MOF), Mr Ken Ofori-Atta, of allegations of conflict of interest in the issuance of some bonds.
The Commission, however, after its investigations of allegations made against the minister by a citizen, Mr Yaw Brogya Genfi, gave wide-ranging directives in relation to the bond issuance processes to ensure transparency and clarity.
After five months of investigations, which included interviews with the parties involved, industry players, transaction advisors, security brokers and the Registrar General., and the review of guidelines, regulations, laws, and other documents, CHRAJ concluded that, “On the basis of the evidence available to the Commission, it has come to the conclusion and therefore holds that the allegations by the complainant that the respondent has contravened Article 284 of the 1992 Constitution by putting himself in a conflict of interest situation in relation to the issuance of the 5-year, 7-year, 10-year and 15-year bonds, have not been substantiated.
The decision was contained in a 140-page document detailing the investigations, analysis and conclusions.
Allegations
On April 25, 2017, Mr Genfi petitioned CHRAJ in a letter titled "Petition to investigate conflict of interest in the recent US$ 2.25 billion bond issued by the Government of Ghana through the Ministry of Finance.”
In his petition, he alleged that, "a number of issues of conflict of interest and lack of transparency have emerged from the bond issuance."
According to him, the bonds were not on the issuance calendar, and that the transaction seemed to have been shrouded in secrecy with the bond processes being limited to one day compared to past processes that were open.
Mr Genfi said one single investor, Franklin Templeton Investment Limited, an American global investment management organisation founded in 1947 purchased 95 per cent of the bond issued.
He insisted that, “a relational interest existed between the Minister of Finance and Mr Trevor G Trefgarne, who in a semi-annual report of the Franklin Templeton Investment Limited of December 31, 2016 is one of the Board of Directors of the organisation, while also being the Chairman of the Enterprise Group Limited.
“Enterprise Group Limited is a company partially owned by Data Bank Limited, a company in which the Finance Minister is known to have significant interest,” Mr Genfi said.
He also complained that Mr Tevor G Trefgarne and the Minister of Finance had also been described as “great friends.”
Findings
Although there was no evidence that Mr Ofori-Atta benefited personally from the transaction, the Commission, however found breaches of the rules on the issuance of bonds.
On the basis of that, it gave wide-ranging directives in the exercise of its powers under Article 287 (2) of the Constitution that provides that "The Commissioner for Human Rights and Administrative Justice or the Chief Justice as the case may be, may take such action as he considers appropriate in respect of the results of the investigation or the admission,” directed that the Minister ensure that all processes in the issuance of bonds by MoF and the Bank of Ghana (BOG) are complied with.
It also directed that the minister, as a matter of urgency, pass regulations, rules or guidelines to regulate the format of and criteria for the auctions and the procedures for participation, bidding, and allocation in auctions in relation to the issuance of securities in the domestic market.
CHRAJ further charged the minister take measures in preventing Primary Dealers who are also bookrunners/Transaction Advisors from gaining unfair advantage because of their dual roles.
It urged the implementation of section 56 of the Public Financial Management Act, 921 of 2016 in the shortest possible time due to the imperative of Bonds becoming a feature of the country’s debt payment system and the appetite of investors.
It said section 56 (1) provided that, “The terms and conditions of all government borrowing shall be laid before Parliament and shall not come into operation unless the terms and conditions are approved by a resolution of Parliament in accordance with article 181 of the Constitution”.
“The issuance of bonds is a form of borrowing and therefore operationalising section 56 (2) of the PFM Act with standard terms and conditions for government borrowing through a legislative instrument or through a resolution of Parliament to enable greater transparency in all borrowings is long overdue,” CHRAJ stressed.
Observations
Among the 21-point findings in its decision, CHRAJ observed that Primary Dealers also doubled up as Bookrunners/Transaction advisors, and that dual role gave them an undue advantage.
It also observed that the “Respondent is either a director, former director or shareholder, or beneficial owner, of several companies whose objects relate to the securities market sector. The companies include Databank and EGL. As such, Respondent’s interests in the growth and wellbeing of those companies, have the potential to conflict with the interests of the state in relation to the securities market such as the issuance of bonds.
It stated that, “The Respondent has business partners and associates related to the securities industry where, according to the Respondent, he has been working for over thirty years. These business partners and associates include partners in Databank, Enterprise Group Limited, Ventures and Acquisitions Limited, as well as Keli Gadzekpo, Trevor Trefgarne and Angela Ofori Atta, also Respondent's spouse.”
Decison
CHRAJ, however, said that “There was also no evidence before the Commission that there was a personal benefit to the Respondent or his private businesses and other relations.”
It said evidence available to the Commission did not support the Complainant’s allegations that the initial pricing guidelines of the Bond were issued around 5:37 pm on March 30, 2017, by e-mail, which was after normal working hours; or that the transaction was opened at 9:00 a. m. on March 31, 2017; or that the public announcement of the transaction was sent by e-mail at approximately 9:09 am. on March 31, 2017, which meant that the transaction was opened before the announcement was made to the public; and also that the issuance summary was issued on March 31, 2017, at about 4:20 pm. by e-mail indicating that the Bond transaction had been closed and announcement made to the public.
It further said that it did not find evidence that the size of this virtual “private placement” makes it akin to a sovereign bond or foreign loan; or that the Virtual “private placement” approach that was used was opened in the morning and closed in the evening of the same day March 31, 2017; or the Enterprise Group Limited is a company partially owned by Data Bank Limited, a company in which the Finance Minister is known to have significant interest; or that the Finance Minister issued the bond in a manner that would favour his friend, family, associates and /or business partners, and that the Bond transaction seems to have been shrouded in secrecy.
Support
Some of the evidence gathered, however supported other claims of Mr Borgya Genfi.
For instance, claims made by him about the fact that the 7-year and 15-year Bonds were not on the 1st Quarter Issuance Calendar (January-March 2017). They were on the 2nd quarter issuance calendar which was released to the BOG on 30th March 2017 at 12:31 PM but operationalized before the end of the 1st quarter 2017; that April 3, 2017, was the Settlement Date; that the process leading to the issuance of the 5-year and 10-year bonds through the tap in arrangement or tap in simpliciter, took place in one (1) day, that is from 12:31 PM on March 30, 2017 when the notice was sent out by the BOG inviting bids and closed at 2:00PM same day; and that Franklin Templeton Investment Limited (an American global investment management organization founded in 1947), purchased about 95 per cent of the Bond issued were all substantiated.
Source: Graphic.com.gh
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NDC mo a bon paa
"hmmm..toilet roll that I used to buy is now 12.50 instead of the previous 10 cedis." Is it a single toilet roll or a pack?
Nii Teiko, unfortunately, what people are complaining of this Christmas and life in general being hard under Akufo Addo may be true. I never got a penny dashed from the NDC during its reign and likewise under the NPP Kuffuor's time and now!! I work hard to earn my living!! I am right now at home, just finished the company i own's budgeting and my own personal budgeting for 2018 and years beyond..short term, middle term, long term. It doesn't look good at all!!. Expenditure exceeds expected income. As usual! Because life is hard!! My company ended 2017 with a total tax debt or arrears of about 17,000 cedis. Thank God for the recently announced tax amnesty..then our debt can be paid off by July 2018 in monthly installments. Then, I owe my kiosk lady around the corner 75 cedis as of now, which may go up to 575 cedis tomorrow if my wife and I go credit more items to go give our respective moms for a belated Christmas. But her kiosk looked emptier than usual on the 27th when I returned forlorn earlier from my office at 2pm. Why forlorn? Because my office lights have been cut as of that 27th December as we owe, so I have stayed home 28th and 29th working from home and will not go anywhere till the 2nd. Thank God I had told my staff that we were reopening on 3rd January.!! That is how hard it is under Akufo Addo and the NPP. On a personal note, I never really checked prices of items in the past...i just buy and go, sometimes on credit...but, this year 2017 since January, the kiosk next-door where I make my purchases of provisions in bulk...sometimes up to 300 cedis at a go..sometimes on credit..the owner occasionally tells me....sorry Daddy, they have increased this and that price...and I respond..it doesn't matter...what is the grand total? But, thinking of it...hmmm..toilet roll that I used to buy is now 12.50 instead of the previous 10 cedis...and the lady even does not stock my favourite toilet roll "Orange Toilet roll" as she says it is too expensive and her customers don't patronize it any more for that account! And just last week Friday I cleared six 1-litre packs of mango juice there, after not seeing such juice with her for some time and I asked her how is business. Her reply was that it has been bad since the beginning of the year and she had not replenished her stock for a while from her wholesalers. I see it to with my own eyes..the state of her business!! Other traders who I converse with in public transport both to and from work say the same thing, likewise some traders I teach...one is into car dealing..importing...and on the side selling second hand clothes at Kantamanto, strong NPP supporters...all complain bitterly! I asked another student..they are all adults.NPP...if anything had changed...he said things were hard! Others, NDC supporters gloat and say..I told you so..when I converse with them. Well, things have never been sweet under all the governments I have lived through...Acheampong, Akuffo, Rawlings, Limann, Rawlings' until 1988 then Rawlings again from 1998 till 2000...i travelled abroad in between...Kuffours time was hard..under Mills I suffered greatly but I at least opened my office and established a business, with employees, Mahama...hhhmmm..it was hard... So, for people to dream voting Nana Addo in will, for example, bring folls bale (obroniwawu) price down from 450 cedis to 150 cedis as the Kantamanto NPP traders said before the elections...hmmm...now they have long faces because it is now 650 cedis. Hey, everybody! Have prices ever reduced in GHANA? Never! Stop dreaming! Drivers are also complaining that fuel prices have not gone down, fisherfolk are complaining about premix...Hey...It has never been rosy oooh!
When will NDC READ AN LEARN! Let the SP start working FAST and will will see who will be still standing!
I dont understand why they breached the rules of bond issuance. This 'verdict' is akin to Prez Mahama's Ford car gift. NPP condemned Prez Mahama and NDC and now have found themselves in a similar situation although no bribery evidence was found. I SAY NPP SHOULD HAVE LIVED ABOVE REPROACH. This is disgusting!!
You know why? Ndc always sending corruption allegations to CHRAJ because he was appointed by John Mahama appointee.
This case is far from being cleared, read through the whole ruling and you will find out that they rather incriminated Ken Ofori Atta. Infant the report admitted there was wrong doing. Read it good. I don't think NDC will leave this scandalous case hanging. Watch out!
Oyiwa!!!! SHAME ON THE RUBBLE ROUSING NDC G00NS. EMPTY BARRELS MAKES THE MOST NOISES.
Where is atto forson he claim the Mr for special initiative should resign he must also resign he is incompetent he doesn't understand economics. Where is adongo another incompetent man who only take pride in insulting the intelligent vice president. Adongo you must also resign from Parliament. The president says talking cannot bring you back to power its about performance. Corruption is not about making noise its about evidence
Everything CHRAJ clears why? is CHRAJ the only body to investigate corrupt officials in this country? people can even sell Ghana and come and tell us CHRAJ has clear them why? mr President Ghanaians deserve better