Minority Heads To Supreme Court Over the $2.25 Billion Bond

The Minority Caucus in Parliament has hinted that it will soon head to the Supreme Court (SC) to seek clarification on the $2.25billion bond issued by Finance Minister Ken Ofori-Atta which did not come to Parliament.

According the them, Article 181 & 268 of the 1992 Constitution of the Republic of Ghana inscribed that all international financial agreements should come before Parliament, yet the recent $2.25billion bond issued by the Finance Minister did not come to the House.

The Minority has again petitioned the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, a financial regulator to also investigate the same issue.

Addressing the  press yesterday, Wednesday, June 5, 2017 in Accra, the Minority Leader Haruna Iddrisu disclosed that although parent company Franklin Templeton was registered in the United States of America, it would appear it used a subsidiary company registered in Luxembourg to purchase 95 per cent of the bonds, thus the petition.

The Luxembourg petition is in addition to an earlier petition filed at the US Securities and Exchange Commission (SEC) which is also probing the issuance of the bond in which US-registered Company Franklin Templeton purchased 95 per cent of the 15-year and seven-year bonds.

The SEC is investigating suspected conflict of interest and insider trading which are violations under US law by Trevor G. Trefgarne, Director of Franklin Templeton and a Board Chairman of Enterprise Group – a company owned and founded by Ghana’s Finance Minister Ken Ofori-Atta.

According to him, their latest petition to CSSF is to satisfy additional jurisdictional issues, based on the revelation, some minority MPs comprising Dr Dominic Ayine, Samuel Okudzeto Ablakwa, and Isaac Adongo have filed a whistleblower complaint with the CSSF in Luxembourg which has begun looking into the matter.

Mr Iddrisu further disclosed that contrary to the impression created by Mr Ofori Atta, the prospectus for the issuance of the said 2017 bond was entirely new, “we can reveal that the notification document or prospectus he presented to parliament  is the same prospectus used by the previous NDC government in the issuance of its September 2016 bond which was based on an unfettered book-building approach”.

The Caucus also described as “shocking” and “astonishing”, plans by the government to spread the repayment of some debts in the energy sector over a 15-year period, through energy sector bonds.

The Minority Leader opined that in an effort to deal with the perennial debt confronting the energy sector, the then National Democratic Congress (NDC) government introduced the Energy Sector Levy Act 2015 (Act 899) which was meant to consolidate all the existing levies into a properly structured revenue stream flow to deal with the debt stock in a comprehensive manner.

Mr Iddrisu explained that consequently, the NDC government through then-Minister of Finance, Mr Seth Terkper, took appropriate steps to restructure the debt owed by industry players in the power sector which resulted in a renegotiation of outstanding obligations.

The Tamale South lawmaker further explained that this led to the affected banks cutting their interest rates for both the cedi and dollar components. This move, he noted, culminated in a payment plan which was agreed upon by the various shareholders.

Based on detailed analyses conducted taking into account the upfront payment made, the entire debt stock was scheduled to be amortised over a period of three to five years, he explained.

According to him, the NDC government further made provisions for clauses which were aimed at terminating the levies upon completion of payment within the stipulated period.

Mr Iddrisu, therefore, pointed out that the introduction of the energy sector bonds by government “is certainly unacceptable as it is completely at variance with the intended repayment time period of a maximum of five years”.

“For the avoidance of doubt, the then-Minister of Finance, had started sanitising the Markets of Energy Bonds to finance the investment needs of the sector and wean them off central Government or Sovereign Guarantee,” he said, adding that these discussions were based on the self-financing rule for commercial projects.

“In the case of the energy sector, it would be based on ‘receivables’ or revenue from projects, such as the Thermal plants, not ESLA,” he emphasised.

“What at all informs the NPP Government’s strong affinity for bonds if not for self-gain?” he wondered, saying it must not be lost that the NPP, then in opposition, vehemently opposed the Energy Sector Levy promising to scrap same upon assumption of office.

“Why has the NPP woefully failed to honour this promise?”, he queried.

“This singular act will span almost 4 successive Governments and Parliaments. How can an arrangement meant to liquidate a loan over 5 years in the previous administration metamorphose into 15 years under this administration?”, he questioned.

“We wish to state emphatically and unequivocally that the NDC Minority is vehemently opposed to this 15-year bond arrangement that appears to surreptitiously extend and impose the ESLA on Ghanaians for 15 years.

“The NDC is serving notice that we oppose the measure and should the majority use its numbers to have its way, we shall review this decision, God-willing, upon assumption of office on ,” he cautioned.

Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.