The private company of Finance Minister, Databank Financial Services, has a shareholding value at a dubious Ghc230, 000, yet, it is underwriting government Securities worth some Ghc20billion a quarter in a borrowing program worth some Ghc60billion.
This is according to Bolgatanga Central Lawmaker who points out that Databank’s negative working capital in respect of the government’s borrowing program makes Databank a hefty gamble for the country’s borrowing program.
“…how does a company with a share capital of less than Ghc300, 000, be allowed to risk state funds where we are doing an average issuance of about Ghc20billion a quarter, now you take this company whose capital is just about Ghc300,000, do they have the financial muscle to underwrite Ghc20billion of government securities; do they have the money to buy?”
Hon. Adongo pointed out the misalignment at a Lecture where he exposed both Finance Minister, Ken Ofori-Atta and Minister of State in Charge of Finance, Charles Adu Boahen, further in the matter of they awarding themselves contracts as government’s bond market advisors.
He points out that by this risky arrangement, all Ken Ofori-Atta has done is placed Databank in a position to make money by earning fees simply as a bond market advisor to the government even without working capital.
And Ofori-Atta did so by leveraging his uncle, President Akufo-Addo’s government’s power, Adongo pointed out.
“So because you are the ones managing the system, I can afford to give it to my company and trust that when they sell I can get the money to give back to the State but I would have made my profit without a working capital, but you would have put the nation at risk,” he said.
The Lecture followed his revelation in May that Ken Ofori-Atta and Adu Boahen, who head the Ministry of Finance as Finance Minister and Minister of State in charge of Finance respectively, had had their companies, Databank Financial Services and Black Star Brokerage Limited, contracted as government’s bond market advisors.
The Finance Ministry, which is headed by Ofori-Atta and Adu Boahen has since released statements claiming the two Ministers had ceased to be active in the companies, justifying their contracting.
But Adongo insists that his checks at the Registrar General’s Department show the two “lied under oath”.