<<Print>>

A US$38 million loan facility that Engineers and Planners (E&P) Company Limited, a Company owned by President Mahama�s brother, Ibrahim Mahama, secured from Merchant Bank has been blamed for the woes of that financial institution. The President has been also accused of imploring Merchant bank to go easy on E&P, a claim which government has strenuously denied. The sale of Merchant Bank to wholly-owned Ghanaian company, Fortiz Equity Fund, has come under severe criticism for what has widely been speculated to be a breach of procedure and a lack of transparency. State pension fund manager, SSNIT, recently issued a statement explaining, among other things, why the deal with Fortiz went through. According to SSNIT, its deal with First Rand would have nothing to do with the bank�s bad loans while that with Fortiz will see it recovering at least 30 percent of the loans as well as make moves to recover the remaining 70 percent. Also, its deal with First Rand would have seen it contribute an additional GHC 88 million. An additional 140 million was also to be injected into Merchant bank by First Rand this was to be paid back by SSNIT. However, with Fortiz it will not have to make any such contribution. But critics say, the First Rand deal would have been the best for Merchant. Fortiz is not willing to accept non-performing assets, including the GH�57 million loan given to Engineers and Planners. It is recalled that FirstRand, the South Bank that offered to purchase a 75% stake in Merchant Bank for GHC91 million, also declined to accept the non-performing assets of the Bank. Fortiz was one of the three companies shortlisted a couple of months back as likely candidates to take over the bank. And it is owned by a 3-man National Democratic Congress group, Fortiz �investors in the banking and real estate sectors.� The 3-man NDC group is composed of Eliken Adadevoh, Kokui Ben Korley and Sam Adu. They are to acquire 90% stake in Merchant Bank for $36 million and pay majority shareholder of the Bank, SSNIT, and others GHC12 million. SSNIT injected GH�42 million into Merchant Bank last year alone. Speaking to the issue of the proposed takeover and the brouhaha surrounding the deal, Kwesi Pratt Jnr., Managing Editor of the Insight newspaper questioned why the public is so desirous of Merchant bank aggressively pursuing Engineers and Planners to recover the loan the mining firm secured in 2007, when the amount of money only translates to about 19% of the total debt owed the bank by defaulters. ��there are very significant facts that need to be addressed. If you look at the total debt portfolio of Merchant Bank, talking about debts that have not been repaid by clients and so on. The amount of money owed by Engineers and Planners, amounts to 19.5 %. There is also a forensic audit which was carried out by Price Water House Coopers, which also details all the loans�and it is obvious it is about 80.5% of the loans are owed by individuals and companies other than Engineers and Planners�. �Now, who owes the 80.5% of that debt portfolio, which has become an issue and which SSNIT argues, made it impossible for it to continue to hold shares in the bank and therefore led to the sale of SSNIT shares to FORTIZ,� he stated on Metro TV�s �Good Morning Ghana�. Kwesi Pratt revealed that he had carefully studied the report by Price Water House Coopers and had seen the list of individuals and companies who are indebted to Merchant Bank, which include Media houses and individuals across the political divide. Armed with this information, the Senior Journalist called for the retrieval of all monies owed the bank and not only the E&P debt and further admonished pundits to refrain from politicizing the issue.