By A. A. Yayra
Founder of African University College of Communication (AUCC), Mr Kojo Yankah has taken a swipe at policy think-tank, IMANI Ghana and the state-owned media, Daily Graphic, for engaging in acts on issue of the sale of Merchant Bank to Fortiz Equity Fund; that has the propensity of running down the Bank of Ghana (BoG) and the Social Security and National Insurance Trust (SSNIT).
Mr Yankah, a one-time Public Affairs Officer in charge of Public Relations and Research at SNNIT and also Editor of Daily Graphic in the 1980s, chided the largest circulating stated-owned media of churning out very exaggerated and misleading headlines on the sale of Merchant Bank which could impugn the integrity of SSNIT and BoG.
On the NPP biased policy think-tank whose boss, Mr Franklin Cudjoe is noted for weird and sometimes oversimplified analysis, Mr Yankah without mentioning IMANI Ghana by name could not fathom why any serious civil society group could insinuate pensioners? money was been used to purchase the distressed bank when it could easily authentic that information from the National Pension and Regulatory Authority (NPRA).
In an article titled ?Sale of Merchant Bank: Hold on a moment!? which was followed with a radio interview on Radio Gold, the former Agona East MP and Minister of State in the former President Rawlings? government stated that the conducts of IMANI Ghana and Daily Graphic on the sale of the ailing bank would do BoG and SSNIT no good but just puncture its integrity, especially when there have been talks on the need to build strong institutions.
?Ghana is building strong institutions upon which our hard-won democracy can be stabilized, and I believe we should all be proud of where we are, compared to where we have come from. Naturally, opinions differ, but aren?t we puncturing the integrity of the same institutions we are trying hard to build (with the aid of a section of the media.)
?When did we ever question the integrity of the Bank of Ghana so harshly as we have done with the sale of Merchant Bank? When did ?Organized Labour? raise red flags so heatedly as is being portrayed by the statement published in the Graphic and carried on other media??
The sale of Merchant Bank to a wholly-owned Ghanaian firm, Fortiz is one that has generated huge debates as a result, a self-professed anti-corruption campaigner under the guise of Executive Directive of Center for Freedom and Accuracy, Mr Andrew Awuni has dragged SNNIT, BoG and other 13 institutions to court to stop the sale.
According to Andrew Awuni, who was a former Presidential spokesperson for ex-president Kufuor and whose source of wealth to have acquired a plush property in the capital is still foggy, there was no due diligence in the sale of the bank to Fortiz, especially when a South African First Rand Limited, in his view had a better offer and ought to have been considered, a claim both BoG and SNNIT had debunked.
A case the Commercial Court presided over by her Ladyship Sophia Benarsco Essah yesterday thrown out citing lack of capacity on the part of Andrew Awuni to bring the action against BoG, SNNIT, Fortiz and others.
As a prelude to the legal calamity that befell him yesterday, in his overzealous fight to stop the deal and make sure First Rand, whom it was alleged had given him money to do its bidding, is chosen over Fortiz, Mr Awuni with support from NPP-tainted IMANI Ghana have embarked on a spiraling smear campaign in the media to run down BoG, SSNIT, Fortiz and others.
As part of the agenda which was ably sanctioned by the New Patriotic Party, and out of which their Members of Parliament organized a press conference to tag the deal as a sham and even threatened a review when elected into power again, communicators of the party with their collaborators blamed the dwindling fortunes of the Bank on a loan Mr Ibrahim Mahama, brother of President Mahama owed it.
Although it was a known fact that majority of the debtors to the bank are either NPP apparatchiks or sympathizers, members of the biggest opposition party and their media allies selectively smeared Mr Ibarhim Mahama and even roped in the President with a spurious publication by Joy Fm which later turned to be false, that President Mahama prevented officials of the bank from taking back their money from his brother.
In the wake of this, IMANI Ghana, which has volunteered it vice-president, Mr Kofi Bentil, a lawyer to Andrew Awuni as a member of his legal team, and has also without cross-checking from the NPRA put out a statement to the effect that funds used by Fortiz for the purchase of Merchant Bank were made available to them by the Bank of Ghana via the Temporary Pension Fund Account or the Tier 2 Pension funds, being held at the Central Bank.
The Chief Executive of the NPRA, Mr Luad A K Senanu has denied the wild allegation by IMANI saying funds contributed into the tier-two funds are intact, not misused but being invested at the Bank of Ghana.
Prior to this, the state-owned Daily Graphic, whose top managements are believed to be known sympathizers of the NPP, and in support of their party?s position on the sale published two stories with ?screaming? and horrific headlines, one on December 14, 2013 ?Stop Mercahnt Bank Sale? and the another one which described the sale of the bank as ?a scam?.
These highly tyrannical conducts of IMANI Ghana and Daily Graphic, Mr Yankah noted could cause SSNIT ?lose significant contributions from close to the 500 staff that Merchant Bank provides a livelihood for as it is the likely outcome should customers continue to lose confidence in the bank on account of the war with words that we are currently witnessing?.
Read Mr Kojo Yankah?s full article on page ?.
Comment: Sale of Merchant Bank: Hold on a moment!
The Daily Graphic front page screaming headline, ?Stop Merchant Bank Sale,? on its December 14, 2013 edition, deserves to be commented upon. It reminds me of an earlier one that described in similar fashion the sale of Merchant Bank as ?A SCAM.? It is clear that the information provided by the two stories has the potential of raising unnecessary alarm but Graphic is entitled to its own editorial decision to give prominence to the two stories (by way of the titles).
Ghana is building strong institutions upon which our hard won democracy can be stabilised, and I believe we should all be proud of where we are, compared to where we have come from. Naturally, opinions differ, but aren?t we puncturing the integrity of the same institutions we are trying hard to build (with the aid of a section of the media.)
When did we ever question the integrity of the Bank of Ghana so harshly as we have done with the sale of Merchant Bank? When did ?Organised Labour? raise red flags so heatedly as is being portrayed by the statement published in the Graphic and carried on other media ?
When did organised labour give ultimatums to the chief regulator mandated by law to handle such transactions? And who should investigate the Bank of Ghana, our known and respected regulator?
Having worked at SSNIT myself, I find it hard to comprehend why the Trust should be treated this way. With the mandate that it has worked with over the years, SSNIT, with the blessing of its board, which includes the TUC, has invested in a number of enterprises. At the same time, SSNIT has divested itself from ventures it no longer considered profitable. I am aware that SG-SSB used to be 100 per cent SSNIT-owned. I am familiar with SSNIT owning majority shares in The Trust Bank. When SSNIT merged the Trust Bank with Ecobank and sold First Atlantic Bank to a foreign company, no investigation was called for because we trusted that Bank of Ghana had done its due diligence as a regulator. SSNIT used to have shares in HFC and later divested itself from that banking institution. Why no noise at the time?
Two years ago, when SSNIT decided to sell its shares to FirstRand of South Africa, there was opposition to it from some political quarters which lamented that the bank was going to ?foreign hands.?
So what has changed ?
Available records show that former majority shareholder SSNIT/SIC Life had to recapitalise Merchant Bank on two occasions with GH?200 million since 2007.
According to the SSNIT statement published on November 25, 2013, when FirstRand made an offer late 2012, it requested the shareholders to ?inject a total of GH?241 million, while FirstRand offered to pay GH?140 million for 75 per cent majority shares. In case SSNIT/SIC would not want to inject any more money, which was likely, their shareholding would reduce to only nine per cent.
In the same proposal, in addition to a possible outward flow of over GH?100 million if SSNIT/SIC had taken up the offer in exchange for the proposed 25 per cent shareholding, FirstRand would not have anything to do with MBG?s debts. The undisputed reality if truth be told was that effectively, we were paying a foreign institution to relieve us of an indigenous asset!
By June, 2013, when the completion period lapsed, the parties had still NOT AGREED, hence there was MUTUAL AGREEMENT to terminate.
New bids, therefore, began pouring in ? from SABRE Advisors FZC UK, UT Bank Ghana Limited and FORTIZ Private Equity Fund Limited.
Internationally recognised and reputable KPMG was appointed Transactional Advisors and they returned a verdict in favour of FORTIZ.
What did FORTIZ offer ?
Perhaps what has MISLED, angered and agitated the minds of most interested parties is the often repeated version which says in isolation : ?FORTIZ has acquired 90 per cent stake with only GH?90 million.? That probably gave the impression that the deal was a ?dash.?
What has not been articulated enough is the fact that FORTIZ offered a PACKAGE to deal with the serious liquidity and capital adequacy ratio (CAR) problems of Merchant Bank. The package binds Fortiz
? To pay GH?90 million immediately for 90% stake in Merchant Bank, to raise the capital adequacy ratio of the bank from its current 4% to 10%;
? Absolve ALL assets and liabilities;
? Since MBG has a negative value, offer SSNIT/SIC 10% stake in MBG as compensation for the loss in value. (SSNIT/SIC need not pay any monies upfront);
? To inject ANOTHER GH?50 million by June, 2014 (to sustain the improved Capital Adequacy Ratio of MBG above 10%, eventually increasing SSNIT/SIC stake to between 10 and 20 per cent.
? To aggressively pursue recovery of ALL bad debts;
? To split any debt recoveries above 30% with SSNIT/SIC on a 70:30 ratio basis in favour of SSNIT/SIC;
? Invest in ICT infrastructure to resolve the bank?s ICT challenges; and
? Improve liquidity of MBG.
So where have workers been short-changed? Doesn?t SSNIT come out better at the end of the day?
Is it that ?organised labour? and other interested parties have not been fed with the full facts of the offer? It seems likely!
Who is FORTIZ ?
FORTIZ is a USD100 million private equity fund established in June, 2013 to undertake private equity investments in financial, real estate, insurance, education, manufacturing, healthcare and oil and gas sectors. It has the objective to ?strategically invest in distressed companies, restructure and revamp them in order to generate long-term growth and profitability.?
The Registrar-General?s Department has all the details. It is a fully-owned Ghanaian company with directors named as Mrs Aurore Selormey, an accomplished accountant and investor (recipient of the Order of the Volta), and Mr Emmanuel Botchwey, Real Estate Developer of REGIMANUEL fame (also a recipient of the Order of the Volta).
The rules of the game allow a company registered the day before to acquire shares on the market. It is not a disqualification. The Bank of Ghana has made this clear in its major statement from the Governor.
According to FORTIZ, and on the recommendation of the stakeholder, it has been recognised that there is the need for a new kind of management team to execute its plans to achieve its return on investment. If it was just recapitalisation, the previous injections by SSNIT would have made the needed difference. SSNIT/SIC Life did the right thing to reconstitute the board of the bank in the past, but did that solve the problem.
The mandated regulator of the Bank of Ghana has indicated he gave approval to the SSNIT-FORTIZ transaction after conducting ?due diligence? and giving certain conditions. Some of the conditions being the payment of GH?90 million into an escrow account by a certain date and providing background information and CVs of new directors of Merchant Bank; two conditions known to have been satisfied.
SSNIT and FORTIZ have signed the necessary Shareholders Agreement. SSNIT has decidedly retired some of its directors, and the new owners are taking inventory and going through transitional issues.
Where comes the ?controversy??
Is it the fact that at some point the then Vice President sat on an appeal from one of those indebted to the bank?
Is it that some critics would have preferred another set of owners of Merchant Bank?
Is it that some politicians risk losing control of the bank because it is an easy source where ?favoured businessmen? are directed to take loans?
Isn?t it in Ghana?s interest to privatise assets, like in the case of Ghana Airways and others, where political interference made them non-profitable?
Are we proud of a bank that has limited ICT infrastructure in this day and age, with no ATM cards to offer its customers? Is threatening and chiding the Bank of Ghana the answer?
Is it not in Ghana?s interest to have Ghanaians deciding to pull resources together to rescue some of our distressed ?government assets??
Are we oblivious of the fact that the rage in the media has negative implications to the purse of government by way of losing a significant tax payer should this institution run aground?
Are we unmindful of the fact that the very Social Security and National Insurance Trust whose integrity is being questioned runs the risk of losing significant contributions from close to the 500 staff that Merchant Bank provides a livelihood for as this is the likely outcome should customers continue to lose confidence in the bank on account of the war with words that we are currently witnessing?
Or are we oblivious of the impact this will have on investor confidence if we question the integrity of regulators such as the Central Bank?
All forms of discussion are useful, but they must be based on concrete facts and not on speculation.
Let us exercise our Freedom of Expression and Freedom of the media in full, but for sure, we should exercise respect for one another. We may have our political differences and diverse opinions, but name calling (with insults) does not build a nation. Crucifying ourselves unjustly can only be to the detriment of ourselves as Ghanaians especially if we base such criticism on unfounded assumption. We ought to stay focused on our agenda as a people to build capacity and develop our nation.
The writer is a communication consultant. [email protected]
Source: Kojo Yankah
