Minority calls for inquiry into $2.25bn domestic bond

The Minority in Parliament is calling for a full-scale parliamentary inquiry into an allegation of conflict of interest levelled against the Minister of Finance concerning the recent $2.25 billion domestic bond issued by the government.

It is the case of the Minority that Mr Ken Ofori-Atta cooked the bond for his friends and cronies, as well as breached Article 181(5) of the 1992 Constitution which requires international transactions to be approved by Parliament.

Addressing a press conference in Accra yesterday to assess the President Akufo-Addo administration’s 100 days in office, the Minority Spokesperson on Finance, Mr Cassiel Ato Forson, said although the bond was meant for domestic investors, a huge chunk of it was issued to Franklin Templeton Investment Limited, an American global investment management organisation.

The America company, he stated, had a Director, Mr Trevor G. Trefgarne, who also doubled as the Board Chairman of the  Enterprise Group, a company partially owned by the Finance Minister.

Breach

“We also wish to point out that this bond issue is clearly an international economic/business transaction within the meaning of Article 181 (5) of the 1992 Constitution. Therefore, we expected that the bond issuance would have been brought to Parliament for approval.

“This is because although the transaction appears to be a domestic sale of bonds, it is in truth a private placement and international economic transaction, given the fact that Franklin Templeton is a United States registered company and, therefore, qualifies as a foreign entity under Article 181 (5) of the 1992 Constitution,” he stated.

The Minority, therefore, called on the Finance Minister to provide Parliament with the full complement of documentation on the transaction for scrutiny and ratification.

It warned that should Parliament fail to meet its demand, it would have no option but to “resort to using the conflict of interest jurisdiction of the Commission on Human Rights and Administrative Justice (CHRAJ)”.

“Furthermore, we also intend to exercise the option of filing a report/petition with the Financial Services Authority of the United States of America  to investigate Franklin Templeton,” Mr Forson said at the event, which was heavily attended by the Minority Caucus.

One day 

He said in the past the “book-building” approach for issuance of bonds initiated by the National Democratic Congress (NDC) government was opened for a minimum of three days to ensure optimal participation.

However, in the case of the $2.25 billion bond issued by the new government, he said, the process was limited to one day,  declaring that that development denied other market players the opportunity to participate in the process.

Details

Going into the details of the conflict of interest, he said: “In an unaudited semi-annual report of Franklin Templeton Investment Limited dated December 31, 2016, Mr Trefgarne was named as one of the five board of directors of the firm.

“He was also described as the Chairman of Enterprise Group Limited in the report. Enterprise Group has 10 board of directors. Principal among them are Mr Keli Gadzekpo, Group Chief Executive of the Enterprise Group; Dr Angela Ofori-Atta, the wife of the Finance Minister, Mr Ofori-Atta, who doubles as the Director of Enterprise Insurance, a subsidiary of the Enterprise Group.

“The Enterprise Group also has the Minister of Justice and Attorney-General, Hon. Gloria Akuffo, and Dr Angela Ofori-Atta as non-executive members of the firm. Ms Akuffo is/was Director of Enterprise Life, a subsidiary of the Enterprise Group (it is not clear whether she has resigned or not).

 “It is now emerging that a firm that Mr Trefgarne works for as a member of the board of directors took a substantial position in the April 3, 2017 bond issued by the Finance Minister.”

According to Mr Forson, information available to the Minority appeared to indicate that Mr Trefgarne was not just the Board Chairman of Enterprise Insurance Limited, a company owned partially by the current Finance Minister’s company, Databank Limited, but also he (Trefgarne) was also a Director of Franklin Templeton, which was the main participant in the recent bond issuance.

 “Putting these apparent facts together, we have reason to believe that there is a relational interest between our Finance Minister and Trefgarne which creates a potential lack of transparency and conflict of interest.

“As we all know, the Constitution provides unequivocally that public officers shall not put themselves in a situation in which their private interest conflicts with their public obligations. There is no record available to us to the effect that the Finance Minister made known publicly this relational conflict of interest,” he stated.

He said the Finance Minister failed or neglected to declare his relationship with Mr Trefgarne and the extent to which that relationship might have potentially affected the decision to sell majority of the bonds to Templeton.

“Furthermore, there is no disclosure as to the extent to which the determination of the price of the bonds could also have been affected by this relationship between the Finance Minister and Franklin Templeton.

“Now that a good link has been established between the Finance Minister and his friend Trevor, it is clear that the Finance Minister issued this bond in a way that will favour his friend, family and business partners. This situation is best described as cronyism and nepotism, cooked for his friend and associates, and not transparent,” he said.

Addison Committee

The Minority also alleged that the Addison Committee which was tasked to investigate the AMERI power purchase agreement travelled to Dubai under the sponsorship of AMERI.

It accused the members of the committee of accepting freebies, including first-class tickets, a first class hotel, per diem and shopping from AMERI.

It described the committee’s action as “embarrassing, unethical and shameful”.

“The committee was under constitutional obligation not to place itself in a situation of conflict of interest. However, as stated above, the committee blazingly breached this constitutional obligation when it accepted the above-mentioned “freebies” from a company it was tasked to investigate.

“Given the public embarrassment of allowing a private entity to bear the cost of the work of the committee or public body, this constitutional breach must be properly investigated and the guilty members of the committee appropriately sanctioned,” Mr Forson said. 

100 days

Earlier, the Deputy Minority Leader, Mr James Klutse Avedzi, in a 15-page statement, had described the 100 days of the Akufo-Addo administration as an abysmal failure filled with broken promises, gross incompetence, as exhibited in the spare parts tax issue, and thuggery by vigilante groups associated with the ruling party.

He discredited some of the achievements enumerated by Vice-President Mahamudu Bawumia last Monday, insisting that a number of those things happened under the Mahama administration.

Attorney-General reacts

Meanwhile, the Attorney-General and Minister for Justice, Ms Gloria Afua Akuffo, has denied allegations of conflict of interest levelled against her by the Minority in connection with the issuance of the bond reports Mabel Aku Baneseh.

She said she was not aware of the issuance of any bond, and that she was hearing of it for the first time in the media.

Reacting to the Minority’s press conference in an interview with the Daily Graphic, Ms Akuffo said she served on the Enterprise Life Board but she resigned after she was appointed the Attorney-General and Minister of Justice.

“I tendered in my resignation letter as a non-executive director of Enterprise Life effective April 1, 2017. I had to give them enough time to get a replacement.

 

I also served as Chairperson of Enterprise Human Resource Committee and needed to give them adequate time to tender in my resignation. I resigned on April 1, 2017,” the Attorney-General noted.

The Minority in Parliament is calling for a full-scale parliamentary inquiry into an allegation of conflict of interest levelled against the Minister of Finance concerning the recent $2.25 billion domestic bond issued by the government.

It is the case of the Minority that Mr Ken Ofori-Atta cooked the bond for his friends and cronies, as well as breached Article 181(5) of the 1992 Constitution which requires international transactions to be approved by Parliament.

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