NDC fights Finance minister over conflict of interest in $2.25 billion bond

Minority National Democratic Congress (NDC) in Parliament has sternly warned that it will drag the New Patriotic Party (NPP) government to the Commission on Human Rights and Administrative Justice (CHRAJ) over conflict of interest in the issuance of $2.25 billion domestic bond at a coupon rate of 19.75%.

The minority has also said that it would petition the Financial Services Authority of the United States to investigate Franklyn Templeton Investment Limited, which was given the unique preferential treatment to purchase 95 percent of the latest government domestic bond.

The investment company also participated in Ghana’s bonds of 2013 and 2015 under former Finance Minister, Seth Terkper.

The minority, who issued the warning at a press conference yesterday in Accra, also called for full parliamentary investigation into circumstances surrounding the “private placement” and unique issuance of the bond since the Minister of Finance, Ken Ofori-Atta, should have brought the bond to parliament for approval.

The ranking member for finance and NDC MP for Ajumako/Enyan/Essiam, Cassiel Ato Forson, who addressed the media on the issue, said the whole transaction was shrouded in secrecy.

According to him, Mr Ofori-Atta, his wife, Dr Angela Ofori-Atta and the Attorney-General, Gloria Akuffo, are partners and shareholders of a company close to Franklyn Templeton Investment Limited that bought the 95 percent of the bond.

“The bond was virtually participated by only two investors. The whole bond transaction was shrouded in secrecy to the extent that Ghanaian investors were denied the opportunity to participate in the deal,” the ranking member said, stressing that the entire deal lacks transparency.

He noted that in the past a ‘book building’ approach for issuance of bonds which was initiated by the NDC government, was opened for a minimum of three days to ensure optimal participation; but in the case of the historic $2.25 billion bond issue, the process was limited to just one day, thus denying other market players the opportunity to participate in the process.

“The ‘private placement’ approach used in this Templeton case was not at all competitive. It was opened in the morning and closed in the evening of the same day, obviously cooked for one single investor,” he argued.

He said what is more worrying is that the statement put out by the Ministry of Finance did not name any companies or individuals that participated in the sale, except to say that “the issuance attracted a number of global portfolio investors, including a very substantial investment in the 15-year bond by very well respected global financial investors.”

The ranking member said the minority MPs’ search had also revealed that one Trevor G. Trefegarne, who is one of the five board of directors of Frankly Templeton, is also the Chairman of Enterprise Insurance Limited – a subsidiary of Frankly Templeton which he claimed is owned by the Finance Minister and his wife.

“Putting these apparent facts together, we have reason to believe that there is a relational interest between our Finance Minister and Trevor Trefgarne, which means a potential lack of transparency and a conflict of interest,” the ranking member said.

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