Minority petitions US Securities Exchange Commission over $2.5m bond
The Minority in Parliament has filed a petition with the Securities and Exchange Commission (SEC) of the United States (US) over the US$2.25 billion bond issued by the government of Ghana which had a US registered company, Franklin Templeton, purchasing 95 per cent.
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“We have successfully filed a complaint with the Securities and Exchange Commission of the United States of America. This will lead to the commencement of investigations by the US regulatory body into the infamous US$2.25 billion bond issuance in which a US-registered company, Franklin Templeton, purchased 95 per cent of the 15-year and 7-year bonds,” the Minority said in a statement issued in Accra yesterday.
Signed by the Minority Leader, Mr Haruna Iddrisu, the statement said: “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 Board Chairman of Enterprise Group, a company owned and founded by the Finance Minister of Ghana, Hon. Ken Ofori-Atta.”
The Minority's complaint, according to the statement, was filed with the Enforcement Division of the SEC in Washington, DC, on May 1, 2017 by the Ranking Member on Parliament's Foreign Affairs Committee, Mr Samuel Okudzeto Ablakwa.
Controversy
Controversy had embroiled the issuance of the bond, with the Minority insisting that only a credible investigation could prove the suspicion or otherwise surrounding the deal.
In April this year, the government, through various domestic bond issuance, raised $2.25 billion. It included $1.13-billion worth of bonds of 15 and seven-year periods at the coupon rate of 19.75 per cent.
The Ministry of Finance said an additional $1.12 billion worth of bonds of five and 10 years were raised via a tap-in arrangement.
The Minority suspected foul play, as it alleged that the Finance Minister was close to some of the people in the deal and called for a bipartisan parliamentary probe into the deal.
But the government brushed off the allegations.
According to the Minority’s statement, the decision to move to the SEC was in fulfilment of a pledge it made to the people of Ghana during a media encounter on April 17, 2017.
Besides, it said, the action was “consistent with our constitutional and democratic mandate”.
It said the SEC thanked the Minority “for the fruitful engagement and provided a reference number for the case as: TCR1493656314549”.
CHRAJ petition
The Minority also made reference to the interest shown in the matter of the bond issuance by the Commission on Human Rights and Administrative Justice (CHRAJ) in a petition from a private citizen.
It was of the conviction that the investigations being conducted by the US regulatory body would neither conflict with nor undermine CHRAJ's investigation.
“The Minority takes this opportunity to re-emphasise our commitment and cooperation in assisting with both investigations in any way we can in the supreme national interest of Ghana and the United States of America,” the statement said.
Ethical issues
Commenting on the petition in an interview, the Minority Leader told the Daily Graphic that the Minority was concerned about the risk of a single obligor of 95 per cent on the economy and conflict of interest issues which raised ethical matters.
He also had concerns with the posture of the Vice-President, Dr Mahamudu Bawumia, on the matter, saying the country’s Number Two man did not show respect to the Minority.
“Instead of responding to the core issues, the Vice-President described the Minority as ignorant. We will respond with commensurate disrespect but not insults or diversions or digresses,” Mr Iddrisu said.
Government’s reaction
Responding to the action by the Minority, a Deputy Minister of Finance, Mr Kwaku Kwarteng, said the government welcomed the decision of the Minority to petition the SEC of the US and CHRAJ to look into the issuance of the bonds.
He said every citizen had the right to resort to those actions for answers on the transactions of the government.
“It is their right to do so. So long as the processes are proper, we will be ready to go along,” he said.
The deputy minister said the government believed that the process for the issuance of the bond was above board and that nothing stinky would come out from any investigations.
“We are confident the transaction was above board and, in the end, the action that we took will speak for itself,” he said.
Mr Kwarteng dismissed the suggestion that the petition might create doubts in the minds of investors and expressed confidence that “the economic management strategies will deliver the positive outcomes to overcome any adverse impact of these developments on investor confidence in our economy”.
