STRANEK-AFRICA is a major stakeholder in the struggle for and promotion of good governance and the rule of law and has over the years helped in shaping public discourse and citizens engagements here in Ghana.
We are by this letter petitioning your high office pursuant to the Special Prosecutors Act (Act 959), 2017, to invoke the jurisdiction of the Special Prosecutor to open investigations into alleged cases of corruption, nepotism, conflict of interest and a general lack of openness and transparency that has characterised the Agyapa Royalties deal of the ruling Government. This follows the widespread traction the deal has gained in both traditional and social media.
It will be recalled that, last year, the Minerals Income Investment Fund Act, 2018 (Act 978) was passed which created a Minerals Income Investment Fund into which a percentage of the annual revenues of the mining companies will be paid to Government as royalties. The Government subsequently amended Act 978 to ensure that Special Purpose Vehicles established by the Fund get unrestricted independence.
- On Friday, August 14, 2020, President Akufo-Addo caused seven (7) agreements relating to the Minerals Income Investment Fund (“MIIF”) to be laid before Parliament for approval.
- The Agreements sought to mortgage Ghana’s future mineral royalties using a Special Purpose Vehicle (SPV) called Agyapa Royalties Ltd. in exchange for an upfront amount of US$500 million to US$750 million. Future resources from gold royalties will go to Agyapa Royalties Ltd. instead of Government, and the deal is structured such that it can run into perpetuity.
- Agyapa Royalties Ltd. was incorporated as an offshore company in a tax haven island in the United Kingdom called Jersey (Channel Islands).
- The SPV is wholly Government owned but 49% of the shares will be sold to private individuals, so that eventually the SPV will be 51% Government-owned and 49% private-owned. The SPV will trade shares on the Ghana Stock Exchange and the London Stock Exchange for the private market.
- The agreements for this deal were indecently rushed through the parliamentary approval process.
- Requests by the Minority for certain important details such as the prospectus, details of incorporation and justification of usage of a tax haven, for effective scrutiny were not heeded by the ruling Government and the majority side of Parliament.
- Requests that Parliament be furnished with periodic reports on the activities of the Special Purpose Vehicle for accountability and transparency were also rejected.
- Requests, by the Alliance of Civil Society Organisations working on Extractives, Anti-Corruption and Good Governance, for a full complement of data and assumptions used in government’s valuation of the royalties being traded did not receive any consideration.
- The following points make it imperative that the Agyapa Royalties deal be thoroughly and immediately investigated by your office:
- The Special Purpose Vehicle lacks transparency as it was incorporated in a tax haven causing matters of corporate governance to be clouded in secrecy and making it difficult to provide proper oversight of the company;
- Mortgaging Ghana’s future mineral royalties in perpetuity runs contrary to the interest of the people of Ghana and Ghana stands to lose billions of dollars in revenue as a consequence of this deal;
- The deal is intended to monetize gold royalties to fund the Budget and ought to have been reflected in the Budget Statements tabled for approval and subsequently enacted in the various Appropriation Acts for the 2020 Fiscal Year, but this was not so;
- The agreement makes it impossible for a future government to replace managers of Agyapa Royalties Ltd.;
- The asset is grossly undervalued per current valuation;
- The deal is embroiled in conflict of interest issues and raises serious ethical concerns on what seems to be a classic case of family and friends’ transaction:
- Africa Legal Associates (ALA) are the legal advisors. ALA is owned by Mr. Gabby Otchere Darko, the cousin of both President Akufo-Addo and Mr. Ken Ofori Atta, the Finance Minister.
- Mr. Kofi Osafo Marfo, son of Senior Minister Yaw Osafo Marfo, is the Chief Executive Officer of Agyapa Royalties Ltd.
- Mr. Ken Ofori Atta’s Databank is the Transaction Advisor for this deal.
- There are also important questions to be answered
- Why was a sovereign entity (Agyapa Royalties Ltd.) incorporated in a tax haven which is globally known for lack of transparency?
- How did the Government arrive at the value of the company?
- How much are Mr. Otchere Darko and Mr. Ken Ofori Atta benefiting from this deal?
- How were the Legal Advisors and Transaction Advisors selected?
- Did President Akufo Addo and/or Mr. Ken Ofori Atta influence the selection of the Legal Advisors and Transaction Advisors?
- Did the Senior Minister’s son go through a credible and competitive international selection process?
- Did the Senior Minister influence the selection process?
It is prudent that your outfit investigates how the value of the royalties being ceded to Agyapa Royalties was calculated and which entity did the evaluation. The owners of the Agyapa Royalties must be disclosed to the general public including their credentials and the shareholding structure. It is important to establish why Government would create an entity to invest Ghana’s gold royalties and register it in a tax haven in the United Kingdom? A tax haven is a place of limited compliance and an avenue to whitewash corrupt and hidden wealth. It must be noted that Ghana is currently on the European Union blacklist and this can be heightened as a result of Ghana incorporating its major sovereign wealth fund in a tax haven.
In conclusion, the Agyapa deal is shrouded in illegality, secrecy and issues of conflict of interest, and is inimical to the interest of the good people of Ghana. The deal raises serious concerns which demand
your urgent attention. Indeed, it is a deal that has shaken the foundations of our moral and ethical society and left all reasonable-minded Ghanaians perplexed.
Your outfit is clothed with powers to unravel the mystery and secrecy surrounding the deal being an office which serves as a specialized independent, preventive, investigatory and prosecutorial anti-corruption agency. We trust you will commence investigations immediately and bring your findings to the attention of all Ghanaians.
Nii Tettey Tetteh
+233 559 042 914
Director of Policy and Political Affairs
+47 412 45 303
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