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Ken Ofori Attah Dragged To CHRAJ Over $2.25bn Dollars Bond Deal

Efo Korsi Senyo | Executive Editor

Yaw Brogya Gyamfi

[dropcap]T[/dropcap]he Ashanti Regional Youth Organizer of the NDC, Mr. Yaw Brogya Gyamfi has dragged Finance Minister, Ken Ofori Attah to the Commission for Human Rights and Administrative Justice (CHRAJ) over the controversial 2.25 billion dollars Bond issued.

Mr. Gyamfi is accusing the embattled Finance Minister and cousin of President Akufo-Addo for allegedly bringing himself into a conflict of interest in the raging 2.25 billion dollars Bond that was floated by the Ministry of Finance on the 31st of March, 2017.

Ghanaians have been outraged at the manner in which the Bond was issued, the secrecy surrounding the sale of the Bond to a company [ads1]whose director is also the group Board Chairman of Enterprise Group, a company owned by Mr. Ken Ofori Atta is what is enraging Ghanaians.

Industry experts have also spoken against it and have raised a potential dip in investor confidence with Ghana, in a recent interview with Accra based Citi FM, the Attorney General who is the principal legal advisor of the Government in an angry outburst said she was not aware of the Bond deal and was hearing about it for the first time from the interviewer.

Mr. Gyamfi’s petition is seen as the start of a long list of legal challenges that will hit Mr. Ken Ofori Atta.

Read the Full petition:                                                                        

April 25, 2017

THE COMMISSIONER

COMMISSION OF HUMAN RIGHTS & ADMINISTRATIVE JUSTICE (CHRAJ), ACCRA

Dear Sir,

PETITION TO INVESTIGATE CONFLICT OF INTEREST IN THE RECENT US$2.25 BILLION BOND ISSUED BY THE GOVERNMENT OF GHANA THROUGH THE MINSTRY OF FINANCE

On April 3, 2017, the Ministry of Finance announced that the Government of Ghana had issued a 15-year and 7-year bond at a coupon rate of 19.75% each. The said issuance raised a total amount of USD1.13 billion. In addition, the Ministry of Finance raised the cedi equivalent of USD1.12 billion in 5-year and 10-year bonds via a tap arrangement.

A number of issues of conflict of interest and lack of transparency have emerged from the bond issuance.  It is imperative that the Commission on Human Rights and Administrative Justice (CHRAJ) investigates same to protect the national interest as per its mandate under article 218 of the 1992 Constitution of the Republic of Ghana.

There is credible information in the public domain as follows:

  1. One single investor, Franklin Templeton Investment Limited, purchased almost 95% of the Bond issued by the Minister for Finance. The size of this virtual “private placement” makes it akin to a sovereign bond or foreign loan.

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  1. The virtual “private placement” approach that was used was opened in the morning and closed in the evening of the same day March 31, 2017.
  2. Franklin Templeton Investment Limited is an American global investment management organization founded in 1947.
  3. In an unaudited semi-annual report of Franklin Templeton Investment Limited dated December 31, 2016, Mr. Trevor G. Trefgarne was named as one of the Directors of the its board.
  4. In the same report, Trevor G. Trefgarne was also described as the Chairman of Enterprise Group Limited.
  5. The 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.
  6. The following are also Directors of the Enterprise Group Ltd. – Dr. Angela Ofori Atta, wife of the Finance Minister, Keli Gadzekpo, business partner of the Finance Minister, Hon. Gloria Akuffo, Attorney-General & Minister for Justice and Hon. Ken Ofori Atta, the Minister for Finance himself.

Further Details

  1. The 7-year and 15-year Bonds were not on the issuance calendar.
  2. The initial pricing guidelines of the Bond were issued around 5:37pm on March 30, 2017, by e-mail, which is after normal working hours.
  3. The transaction was opened at 9.00am on March 31, 2017.
  4. The public announcement of the transaction was sent by e-mail at approximately 9:09am on the March 31, 2017, which means the transaction was opened before the announcement was made to the public.
  5. The issuance summary was issued on March 31, 2017, at about 4:20pm by e-mail indicating that the Bond transaction had been closed and announcement made to the public
  6. April 3, 2017, was the Settlement Date and not the closing date of the Bond.

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Please Note

  1. From the points above, a reasonable person has cause to believe that there is a relational interest between Hon. Ken Ofori Atta and Mr. Trevor G. Trefgarne, who have been described as ‘great friends’.
  2. The clear link between the Finance Minister and his friend Trevor Trefgarne, and the sub-links with the Finance Minister’s family and business associates, leads to legitimate questions like
    1. did the Finance Minister issue the bond in a manner that would favour his friend, family, associates and/or business partners;
    2. was the deal influenced by cronyism, nepotism and corruption.
  3. The Bond transaction seems to have been shrouded in secrecy – the process was limited to one day, unlike past bonds where the “book-building” method had been used and the process was opened for a minimum of three days to ensure optimal participation.
  4. There is no record available to the effect that the Finance Minister disclosed his relational interest in the transaction.

Please note further

  1. On Monday, April 3, 2017, the Ministry of Finance issued a statement announcing that the Ministry of Finance had “successfully issued 15 and 7 year bonds with the same coupon rate of 19.75%, raising a total amount of USD1.13 billion. In addition, the Ministry of Finance raised the cedi equivalent USD1.12 billion in 5 and 10 year bonds via a tap arrangement’ – a copy of the statement is attached marked ‘A’
  2. It was reported by Reuters that “a senior government official, speaking on condition of anonymity, said Franklin Templeton had participated in the sale”, and that “Franklin Templeton’s high-profile bond fund manager, Dr Michael Hasenstab has taken a “substantial” position in Ghana’s cedi-denominated government bonds” – a copy is attached marked ‘B’

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  1. On April 19, 2017, the Ministry of Finance issued a response – a copy is attached marked ‘D’.
  2. On April 20, 2017, the Minority in Parliament issued a response – a copy is attached marked ‘E’
  3. On April 18, 2017, the Attorney-General & Minister for Justice on a radio station (Citi FM) indicated that she resigned from the Enterprise Group on April 1, 2017, and that she had no knowledge of the bond arrangement – a copy of the audio recording can be accessed from Citi FM. However, the Ministry of Finance records show that the bond process was opened and closed on March 31, 2017.
  1. On April 21, 2017, Dr. John Gatsi (Head of Finance Department, University of Cape Coast) published an article entitled ‘What is External Borrowing in the context of the issuance of the US$2.25 Billion Euro Bond and Ghana’s Public Borrowing Guidelines’ – a copy is attached marked ‘F’.

Some Relevant Laws, Regulations & Guidelines

1992 Constitution of the Republic of Ghana

“Article 284 – A public officer shall not put himself in a position where his personal interest conflicts or is likely to conflict with the performance of the functions of his office.”

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Code of Conduct for Public Officers of Ghana

Principle 1.1.3

Public officer shall ensure that their personal interests or activities do not interfere with or appear to interfere with their obligations to serve the state.

Principle 1.2.4

Public officers shall not seek or obtain personal or private benefit from the use of information acquired in the course of their official duties.

Principle 1.3.1

Pubic officers shall not allow their personal interests, activities or conduct to interfere with or appear to interfere with the performance of their duties/functions.

Principle 1.4

Public officers shall not put themselves in a position where their personal interest conflicts or is likely o conflict with the performance of their functions/duties.

CHRAJ’s ‘Guidelines on Conflict of Interest to assist Public Officials Identify, Manage and Resolve Conflicts of Interest’:

“2.0 Definition of Conflict of Interest

A Conflict of Interest refers to a situation where a public official’s personal interest conflicts with or is likely to conflict with the performance of the functions of his/her office. In other words, a conflict of interest includes:

  1. any interest or benefit, financial or otherwise, direct or indirect;
  2. participation in any business transaction, or professional activity;
  1. an act or omission;

which is or appears or has the potential to be in conflict with the proper discharge of a public official’s duties in the public interest.

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Conflict of interest occurs when a public official attempts to promote or promotes a private or personal interest for himself/herself or for some other person, and the promotion of the private interest then results or is intended to result or appears to be or has the potential to result in the following:

  1. an interference with the objective exercise of the person’s duties, and
  2. an improper benefit or an advantage by virtue of his/her position.”

Section 4.2

“Disclosure of Conflicting Interests

Whenever a conflict of interest situation occurs or is likely to occur, the public official must make a disclosure of the situation as provided by law or as follows:

What to disclose  :    assets and liabilities; gifts, conflicting interests, outside employment, and NGO activities

How to disclose   :    in writing, verbal, and surrendering the item

When to disclose :    as soon as a conflict of interest situation occurs or is likely to occur, and when in doubt

To whom               :    CHRAJ, superior officer/head of institution, and ethics committee or compliance officer or a similar set up within the institution

Section 4.3

“Resolution and Management of Conflict of Interests

Conflicts of interests may be resolved or managed by one or more of several ways, including the following:

  1. divestment or liquidation of the interest by the public official;
  2. detachment of the public official from involvement in an affected decision-making process;

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  1. transfer of the public official to duty in a non-conflicting function;
  2. re-arrangement of the public official’s duties and responsibilities;
  3. resignation of the public official from the conflicting private-capacity function; and

It seems clear that Hon. Ken Ofori Atta –

Other relevant applicable rules are as follows:

In CHRAJ’s ‘Guidelines on Conflict of Interest to assist Public Officials Identify, Manage and Resolve Conflicts of Interest’, section 3 goes further to identify conflict of interest situations.

Section 3.1

“General Rule: A public official shall not participate in an official capacity in any particular matter which to his knowledge:

  1. he/she has a financial interest; and
  2. any person whose interests are imputed to him in any way has a financial interest; if the particular matter will have a direct effect on that interest.

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Section 3.2

“A public official shall not take an action in an official capacity which involves dealing with himself/herself in a private capacity and which confers a benefit on himself/herself.

An example of self-dealing is the practice where tender board members bid for public contracts, which the board manages.

Section 3.3

“3.3.1 General Rule:

A public official shall not participate in a matter involving specific parties, which he/she knows is likely to affect the interest of a member of his/her family, friend or partner if a reasonable person with knowledge of the facts would question his/her impartiality in the matter.

Section 3.5.1

“Use of Public Office for Private Benefit

General Rule: A public official shall not use his public office for his/her own private benefit, for the endorsement of any product, service or enterprise, or for the private benefit of friends, relatives, or persons with whom the public official is affiliated in a private capacity, including political parties, non-profit organizations of which he/she is an officer or member, and persons with whom the public official has to seek employment or business relations.”

It further seems clear that Hon. Ken Ofori Atta

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Several questions must be answered including the following:

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In line with my duties as a citizen of this nation, and in light of the above, I have no option than to petition CHRAJ for an investigation into the matter and the application of the necessary sanctions.

I am confident of your ability to investigate this matter thoroughly, dispassionately and in a non-partisan manner to help us reach a just conclusion.

Yours in the Service of the Nation

YAW BROGYA GYAMFI

  CITIZEN OF GHANA

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cc        H.E. President Akuffo Addo

Flagstaff House, Accra

 

Rt. Hon. Speaker of Parliament

Parliament House, Accra

 

Her Ladyship the Chief Justice

Judicial Service of Ghana

 

The Hon. Minister

Ministry of Finance, Accra

 

The Hon. Minister

Ministry for Justice &

Attorney General, Accra

 

Trevor G. Trefgarne

c/o US Embassy, Accra

 

Securities Exchange Commission

c/o US Embassy, Accra

 

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