Kufuor Administration Acted In Good Faith

The Minority in Parliament has stated that the previous government acted in good faith in negotiating the Vodafone Sales and Purchase Agreement (SPA), dismissing suggestions by the majority that the country was short-changed.

The minority described as erroneous, the ministerial committee’s conclusion that the sale price of $900 million for 70 per cent of GT was low because the transaction advisor had put a higher value and Telecom SA offered a higher bid of $947 million for 67 per cent.

“Ladies and gentlemen, we disagree on this conclusion of the value of GT. The transaction advisor had put a value of $769 million and added a negotiable 40 per cent goodwill, taking the value to a negotiable amount of $1,075 billion”, Minority Leader Osei Kyei-Mensah-Bonsu said at a press conference yesterday.

According to the Minority, the transaction advisors themselves, after superintending the tender process yielded highest tender of $520 million from France Telecom, adding that the advisor did not even recommend the France Telecom offer opting to go for Portugal Telecom’s offer of $480 million in the light of other serious considerations.

The Minority said the eventual negotiated offer from Vodafone of $900 million far exceeded the offer of $520 million by France Telecom and the proposal of Portugal Telecom of $480 million.

“As for Telecom SA, they had made an initial offer of $320 million which was rejected by the transaction advisors”, the Minority countered, adding that “apart from Telecom SA’s low bid of $320 million, they also did not meet the technical requirement of 6million mobile lines/subscribers that was required of all bidders”.

The Minority said long after the end of the original tender, at the end of December 2007, when the transaction advisor had submitted their report to government and government had entered into and almost concluded the SPA with Vodafone, Telekom SA on May 15, 2009, made another bid.

“The bid was too late. Apart from that, the basis of the bid was not much better than the Vodafone offer as among others, their evaluation of the net debt of GT was wrong ($230 million instead of $450 million) and hence their valuation/enterprise value of GT”, the Minority said.

The Minority added that Telekom SA had also asked for the inclusion of not only the fibre optic fibre broadband, but also GT’s rural networks.

According to the Minority, the ministerial committee’s conclusion that the Government of Ghana realised only $266.57 million from the Vodafone deal was misleading since $900 million was transferred by Vodafone, adding that a simple check at the Bank of Ghana would have confirmed that.

It also dismissed assertions by the committee that the fibre optic backbone was grossly undervalued explaining that in terms of cost, the Government of Ghana had spent $30 million, and the Volta River Authority had spent $48 million, a total of $78 million.

“The valuation paid by Vodafone is $100 million. Let the good people of this country be the better judges and certainly not any group which sets out to satisfy their paymasters, to demonise people without any basis”, the Minority argued.

The Minority Leader also dismissed claims that there was executive interference in the sale of GT with President Kufuor being the one who agreed on the transaction price and technical consideration, among others.

The Minority said that conclusion was very strange, preposterous and absurd, adding that the former president did not solely decide on the price on his own technical and legal assumptions.

The Minority contended that the best offer recommended by the Transaction Advisor was $520 million and if the government subsequently secured $900 million, how is anyone able to ascribe bad motives to anybody who took part in securing the far better offer of $900 million?

“In any case, the negotiations with Vodafone were undertaken by the Executive, and the President is head of the Executive. So how could the Executive interfere in its own processes?” the Minority questioned.