The Finance Ministry’s restless hurry to get Parliamentary approval for it to borrow money to fund the Ghana Amalgamated Trust (GAT) has left observers feeling that the Ministry is trying hard to cover the trail of a cash cache.
Quick changes to GAT’s funding structure, after an attempt to use Sovereign guarantee to raise US$2billion attracted a suit from the MP for Bolgatanga Central, Isaac Adongo, has also left an impression among critics that the whole thing is an attempt to create conduit for some people with huge sums of money sitting at home to route it into the system.
Financial experts who have spoken to Whatsup News on condition of anonymity have also said the shroud of secrecy around the fight for Parliamentary approval for funding to be secured for GAT is also worrying.
Mr. Ken Ofori-Atta, after an initial proposal to Parliament that his Ministry be given Sovereign Guarantee by Parliament so that it borrows money for the five banks came under GAT after the Bank of Ghana’s clean up exercise, was responded to by Isaac Adongo with a suit, did alterations to the original memorandum and sent it back to Parliament secretly for approval.
Adongo had gone to court on the grounds that the move to use borrowed funds to support the ADB, Prudential Bank, UMB, Sahel/Omni Bank and NIB, was illegal as it contravenes the banking laws of Ghana.
It was while the Adongo case was still pending that Mr. Ofori-Atta sent a revised memorandum on GAT to Parliament. The revised document intercepted by Whatsup News is marked “secret.”
In it, Ken Ofori-Atta admits that Adongo’s suit is a death blow and that the suit has since led to the legal advisors of the Bank of Ghana, the National Pensions Regulatory Authority and the Securities and Exchanges Commission to abandon the loan funding option.
Rather, these legal advisors have advised it that it raises Ghc800million directly from Government by making government preference share investor. The Ghc800million would then be invested in the equities of ADB, Prudential Bank, UMB, Sahel/Omni Bank.
Also, the original bond offering in the name of GAT is replaced with preference share offering (PCOA) in which investors will raise Ghc3billion from which government’s Ghc800million will then be recouped while the extra Ghc2.2billion raised will be used to fund the NIB.
This convoluted arrangement has raised serious eyebrows in the financial community.
In effect, what GAT is going to do is borrow Ghc800million from the government but not through direct borrowing. It will make government front for it as preference share investor, only for GAT to have a starting opportunity to raise Ghc3billion from which government’s Ghc800million will then be redeemed.
To raise the Ghc3billion, the revised memorandum said the shares may be floated on the Ghana Stock Exchange. This way, the individuals with bags of money stashed away in their homes, will have the opportunity to buy the shares in GAT.
It is believed that many of the future investors in GAT are people with deep connections to the government or actors in the current government.
The Ghc800million that government is expected to put up is believed to be money that will come from SSNIT. Yet, SSNIT is already a major shareholder in most of these banks being rescued-particularly ADB and NIB.
In essence, SSNIT will lend itself some money to rescue banks that it holds major shares in.