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$2.25bn Bond Petition Bogus – Minister Tells Committee

By Daily Guide
General News Ken Ofori-Atta
JUN 1, 2017 LISTEN
Ken Ofori-Atta

The Finance Minister, Ken Ofori-Atta, says the petition to the Commission on Human Rights and Administrative Justice (CHRAJ), to investigate the $ 2.25 billion bond issued by the government is utterly frivolous and without basis.

According to him, the petition is unwarranted, specious and founded either on lack of knowledge of the facts and circumstances of a bond issue or mischief.

Godfred Yeboah Dame, a Deputy Attorney-General and Minister for Justice, in a response to CHRAJ on behalf of the Finance Minster, stated that the complainant was unable to refer to any entity that participated in the issue of the bonds on 31st March, 2017 in violation of the processes.

Yaw Brogya Genfi, the Ashanti Regional Youth Organiser of the National Democratic Congress (NDC), dragged Mr. Ofori-Atta to CHRAJ, alleging “conflict of interest in the $2.25 billion bond issued by the Government of Ghana through the Ministry of Finance.”

No Basis
But the deputy AG described the petition as laughable, indicating that the NDC youth organizer “yet fails to set out particulars of the alleged conflict of interest in the petition.”

Mr Dame argued, “The Ministry of Finance and the Minister for Finance categorically deny the allegations and assert that there has been no breach of any of the laws or rules governing the issue of bonds.”

He said the allegations of the complainant are based on plain falsehoods, and that there had been no conflict of interest involving the respondent.

He indicated that no distinct particulars of conflict were made out by the complainant in his petition, in order to aid in an efficient determination of the claims by petitioner and to shed light on the full circumstances of the issuance of the bonds in question by the Government of Ghana.

Mr. Yeboah Dame noted that to meet the threshold of an investigable complaint, the complainant ought to have shown which of the procedures for the issuance of bonds were breached, and particularly was breached as a result of conflict of interest between the Minister of Finance and the Primary Dealer/Joint Book Runner or Franklin Templeton Investment Limited.

We submit that this allegation raised in the petition does not impinge on conflict of interest. Respectfully, the propriety or otherwise of the issue of 7-year and 15-year bonds when same is allegedly not on the issuance calendar, does not fall within the jurisdiction of this Commission.”

Educates CHRAJ
Mr. Dame pointed out that “however, out of sheer desire to inform the Commission, we say that (a) letter signed by former Finance Minister, Seth Terkper, clearly indicates that medium-term instruments may be reopened to create liquidity and benchmark securities. 7-year and 15-year bonds fall into the classification of medium term bonds.”

On the allegation of the initial pricing guidelines of the bond issued around 5.37 pm on March 30, 2017, by email, which was after normal working hours, Mr. Dame said, “This is a completely false and misleading allegation. We reject it outright and respectfully urge the Commission to reject it as well.”

Conflict
The deputy AG said the ministry, in the matter of the issue of bonds, does not transact with any investor and that all transactions are carried out by Book Runners designated by the Bank of Ghana as Primary Dealers.

“Further, there is no law or regulation that imposes a limit on the amount of an investor's offer. The transaction processes for this issuance did not deviate from previous issuances, as to lead to a finding that Franklin Templeton was favoured.”

Mr. Dame asked, “Did the Finance Minister issue the bond in a manner that would favour his friend, family, associates and/or business partners, and was the deal influenced by cronyism, nepotism and corruption?”

He stated that there is no record available to the effect that the Finance Minister disclosed his relational interest in the transaction.

“The investor in the bonds, Franklin Templeton Investment Limited, is a corporate person, and not an individual. Neither the Ministry of Finance nor the Minister for Finance has any interest in the said corporate body. Respondent has, at no point in time, held any shares or directorship in the company Franklin Templeton.

“It is amply clear that the assertion of a 'relational interest' between the minister and the said Trevor Trefgarne is an imaginary one. The complainant, knowing that there is no basis to assert 'conflict of interest,' now conjures a facile, baseless and contrived notion of a 'relational interest' between the Minister for Finance and the said Trevor G. Trefgarne.”

Mr Godfred Yeboah Dame stated that whatever contrivance the complainant comes up with, he is simply unable to show that the respondent had any interest in the transaction that required disclosure.

“The respondent had absolutely no interest in the transaction in issue to disclose. The transaction was an open market transaction carried out in accordance with Bank of Ghana Guidelines, and not designed to benefit any particular investor in anyway,” he explained, and contended that a conflict of interest allegation arises in the light of clear facts which support a conclusion that a public officer's personal interest conflicts with or is likely to conflict with the performance of the functions of his or her office.

By Jeffrey De-Graft Johnson

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