NDC Minority Still Whining Over U.S.$2.25 Billion Bond

By Maxwell Ofori

The Minority in Parliament has urged the House to prevail on the Minister for Finance, Mr Ken Ofori-Atta, to provide detailed information on the famous US$2.25 bond.

A motion moved by the Minority Leader, Haruna Iddrisu, yesterday, also requested for the full complement of documentation related to the issuance, the participants, the utilisation of the proceeds, and the currency in which the bond was settled.

The Minority recently held a press conference to demand a full scale parliamentary probe into how some persons they refer to as very close friends of Ken Ofori-Atta purchased ninety five percent of Ghana's recent US$2.25 billion bond.

Ato Forson, Minority Spokesperson on Finance, alleged that the bond was conveniently prepared for the Minister's friends and business partners to have easy access, and enjoy the high eighteen percent to nineteen percent interest on it.

"Honourable Trevor Trefgarne is also a Director of Franklin Templeton, which is the main participant in the recent bond issue. Putting this apparent fact together, we have a reason to believe that there was a relational interest between our Finance Minister and his good friend Trevor Trefgarne, which creates a potential lack of transparency and a conflict of interest. As we all know, the Constitution of the Republic provides, unequivocally, that a public officer should not put themselves in a situation where their private interest conflicts with their public obligation. There is no record available to us to the effect that the Finance Minister made known publicly his relational interest that conflicts very much so, in the interest in his company with Trevor Trefgarne, to the extent to which the relation might have potentially affected the decision to sell majority of the bonds to Franklin Templeton," he noted in the statement.

On Monday, April 3, 2017, the government stated it was successful in the auction of a total of $2.25 billion in four bonds. The first two bonds, totaling US$1.13 billion, was issued at 15 and 7 years period, with the same coupon of 19.75%.

In addition, the Ministry of Finance raised the cedi equivalent of US$1.12 billion in 5 and 10 year bonds, via a tap-in arrangement, a move the Minority had since cried foul over. The Minority filed a complaint with the Securities and Exchange Commission (SEC) of the United States of America over the bond, which was issued in April 2017.

According to the Minority, the petition will lead to investigations by the US regulatory body into the bond issuance, in which a US registered company, Franklin Templeton, purchased 95 percent of 15-year and 7-year bonds.

"The SEC will, primarily, be investigating suspected conflict of interest and insider trading, which are violations of US law by the Hon. Trevor G. Trefgarne, who is a Director of Franklin Templeton and a Board Chairman of Enterprise Group - a company owned and founded by the Finance Minister of Ghana, Hon. Ken Ofori Atta," a statement from the Minority explained.

It emerged that the Council of State allegedly met the Minority to negotiate the bond, an allegation the Council of State rubbished categorically in a statement issued by the acting Secretary to the council, Mrs Peace A.P. Okantey.

As if that was not enough, the Minority wants the Minister to provide detailed information on the bond, a request the House approved, and directed that the Minister provide the information in a week's time, though he can seek an extension.

Addressing the Parliamentary Press Corps minutes after the day's sitting, Mr Ato Forson expressed shock over the issue, indicating that the Minister was causing financial loss to the state through the controversial bond.

According to the Minority, the country would have been better off with $330 million in a year, if he had not decided to go this tangent.

"Currently, 91 days Treasury Bond, as at 17th of April, is traded at 16.35 per cent. The 182 days Treasury Bond is traded at 16.70 per cent.

"But, what surprises me, is that the Finance Minister decided to go for a long-term debt of 19.75 per cent to switch off a debt of 16.35 per cent. In fact, his action is woefully causing financial loss to the state," he remarked.

He continued that from his circulation, Ghana would have been better off if she had decided to rollover the existing Treasury Bond, which is being traded at 16.35 per cent, instead of going for 19.75 per cent.

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