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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.