The Minister of Finance, Ken Ofori Atta did not engage in any conflict on interest during the issuance of some bonds earlier in the year, the Commission on Human rights and Administrative Justice (CHRAJ) has declared.
This follows five months of investigations, which included interviews with the parties involved, industry players, transaction advisors, security brokers and the Registrar General., and the review of guidelines, regulations, laws, and other documents.
CHRAJ’s investigation was triggered by a petition from a private citizen, Yaw Brogya Genfi on April 25, 2017, which alleged “a number of issues of conflict of interest and lack of transparency have emerged from the bond issuance.”
According to him, the bonds were not on the issuance calendar, and that the transaction seemed to have been shrouded in secrecy with the bond processes being limited to one day compared to past processes that were open.
Apart from the secrecy in issuing the bonds, Mr Genfi’s petition of pointed out that Franklin Templeton Investment Limited, an American company which purchased 95 per cent of the bond issued had one Trevor G Trefgarne as one of its Board of Directors.
This same Mr Trefgarne is also the Chairman of the Enterprise Group Limited, “a company partially owned by Data Bank Limited, which the Finance Minister is known to have significant interest,” Mr Genfi said.
But after it’s lengthy investigations CHRAJ, according to Graphic Online, has concluded that:
“On the basis of the evidence available to the Commission, it has come to the conclusion and therefore holds that the allegations by the complainant that the respondent has contravened Article 284 of the 1992 Constitution by putting himself in a conflict of interest situation in relation to the issuance of the 5-year, 7-year, 10-year and 15-year bonds, have not been substantiated”.
Although there was no evidence that Mr Ofori-Atta benefited personally from the transaction, the Commission, however, found breaches of the rules on the issuance of bonds thus directed that:
“The Minister ensure that all processes in the issuance of bonds by MoF and the Bank of Ghana (BOG) are complied with.
It also directed that the minister, as a matter of urgency, pass regulations, rules or guidelines to regulate the format of and criteria for the auctions and the procedures for participation, bidding, and allocation in auctions in relation to the issuance of securities in the domestic market.
CHRAJ further charged the minister take measures in preventing Primary Dealers who are also bookrunners/Transaction Advisors from gaining unfair advantage because of their dual roles.
It urged the implementation of section 56 of the Public Financial Management Act, 921 of 2016 in the shortest possible time due to the imperative of Bonds becoming a feature of the country’s debt payment system and the appetite of investors.
It said section 56 (1) provided that, “The terms and conditions of all government borrowing shall be laid before Parliament and shall not come into operation unless the terms and conditions are approved by a resolution of Parliament in accordance with article 181 of the Constitution”.
“The issuance of bonds is a form of borrowing and therefore operationalising section 56 (2) of the PFM Act with standard terms and conditions for government borrowing through a legislative instrument or through a resolution of Parliament to enable greater transparency in all borrowings is long overdue,” CHRAJ stressed.