PDS accounts frozen due to anomalies in the bank guarantee

General News of Saturday, August 3, 2019

Source: Graphic.com.gh

2019-08-03

The Financial Intelligence Center (FIC) froze the bank accounts of Power Distribution Services (PDS) following the detection of anomalies in the bank guarantee provided prior to the takeover of the badets of the power company's electricity company. Ghana (ECG).

According to the Information Minister, Kojo Oppong Nkrumah, the accounts were frozen before the publication of an official statement of the government last Tuesday on the suspension of the PDS.

He told the Daily Graphic that the government quickly alerted the FIC after detecting anomalies in the PDS guarantee, which resulted in the freezing of the company's accounts. He explained that the accounts would remain frozen until investigations were completed and all issues were resolved.

"It is important for Ghanaians to note that the government is committed to ensuring the security of all badets of Ghana's electricity company," Nkrumah said.

The transfer of ECG badets in possession of PDS was underway, the minister said.

Asked about the atmosphere between the leadership of the PDS and the ECG, Mr. Nkrumah replied: "tense but moving".

Suspension

In a statement issued by Mr. Nkrumah on Tuesday, July 30, 2019 to announce the suspension of the concession contract, the decision followed the "detection of fundamental and substantial violations of the PDS's obligation to provide payment guarantees ( transaction guarantees that were discovered during subsequent controls ".

"On demand guarantees were essential prerequisites for leasing badets on March 1, 2019 to secure badets transferred to the concessionaire," the statement said.

Investigations continue at home and abroad.

Compact

Nkrumah told reporters on Thursday, Aug. 1, 2019, that the government was taking steps to secure the second tranche of the US $ 190 million pact from the US government following the suspension of PDS operations.

Subsequently, a team was tasked to continue its relationship with the US government through its agency, the Millennium Challenge Corporation (MCC).

He told reporters: "This commitment is about possible next steps after the survey and channels for sharing information as part of this investigation."

According to him, the team was also expected to visit the United States of America (USA) probably next week as part of their engagement.

He also told the media last Thursday that a thorough investigation into the detected violations had started and would end within 30 days.

Due diligence

According to Mr. Nkrumah, the initial due diligence, led by the transaction consultants, did not detect any problems.

The second-level checks, led by the Ghanaian side, first gave rise to a response from Al-Koot, the Qatari insurance company providing the bond, confirming the guarantee, he said.

A third-level check led by the Ghanaian side, according to the Information Minister, has detected anomalies within Al-Koot, triggering a fourth-level check.

He said that "fourth-level control involved sending a first team from Ghana's mission to Qatar to dialogue with Al-Koot officials for further verification." This fourth level has further proven the anomalies and suggested unwelcome actions that are now the subject of a thorough investigation, "said Nkrumah.

The PDS reacted to the suspension and denied any fault on his part.

A statement from the company said: "The PDS has taken note of the statement issued by the government (…) and wishes to state for the record that it has always acted and would continue to act in good faith to any time."

He clarified that the company would apply the procedures "in accordance with the terms of the transaction agreement between it and the Ghana Electricity Company, on the one hand, and the Government, by the Intermediary of the Ministry of Finance, the other ".

MCC contract

Ghana has signed an agreement with the US government to release $ 498 million to support the transformation of Ghana's energy sector and boost private investment.

The first $ 308.2 million was released in 2016.

In accordance with the MCC agreement, the second tranche, worth $ 190 million, will be released once Ghana has fulfilled the requirements to access the fund.