Ken Ofori-Atta uses the GAT scam to take over NIB, ADB and other banks?

Since taking office in 2017, our Minister of Finance, Ken Ofori-Atta, has used various stratagems and strategies to enrich and strengthen his financial empire and impoverish other companies considered as competitors or non-aligned. with his party, the New Patriotic Party. This began with the award of lucrative public contracts to his company, Databank, at the expense of qualified competitors. Now he has extended it to state institutions, using dubious arrangements that disconcert all well-meaning Ghanaians.

The latest is the Ghana Amalgamated Trust Limited (GAT). In the coming days, the recovery plan of our national banking badets such as NIB and ADB, as well as a significant stake in three other banks, namely Prudential Bank, Omni / Sahel Bank and Universal Merchant Bank (UMB), will come to fruition.

Before going into the details, let me tell you that GAT is a total scam, a dubious arrangement and a national tragedy brought together by people claiming to be interested in Ghana's welfare, but with a plan clear to make you pay astronomically over the next five years for Ken Ofori-Atta to take back these banks. The plan is simply to "use state resources to clean these banks in the name of government support and resume them in five years" when they are healthier and ready to take off. " How is it going to happen?

In this article, I intend to review this arrangement and the dubious plan of taxing taxpayers huge budget costs without any real value, except to satisfy Ken Ofori-Atta. I will also outline how the entire device is already prepared for Franklin Templeton (FT) Plc's upcoming 2017 Ken Bond celebrity.

1. GAT IS A SCAM AND HIGH TAX WASTE

In January of this year, the Governor of the Bank of Ghana announced that private pension funds had entered into a private agreement to help these banks recapitalize after their failure to close the accounts.^st December 2018 being the deadline for recapitalization. At the time, we were told that this would not cause any cost to the state. Several questions were asked about the ownership of GAT and the underlying private funds. These have never been answered so far.

To date, the government has not responded to the question of the property of GAT. Who are the so-called private pension funds and what are their names? What is the ownership structure between these fund management companies? Interestingly, the pension funds claim that they were neither aware nor consulted about the GAT. So who are the owners?

Information provided to the Registrar General's Department reveals that GAT was incorporated on 17 December 2018 with the National Trust Holding Company Limited (NTHC) as a 100% shareholder on behalf of the Government of Ghana. It is interesting to note that the NTHC belongs to the Social Security and National Insurance Fund (SSNIT) – 43.48%; the Public Insurance Company (SIC) – 19.70%; the National Investment Bank (NIB) – 19.70%, the company AccreCon Consulting – 12.39%; and the NTHC PF – 4.73%. Thus, how can GAT be a private sector initiative even though its designated shareholder is an entity majority-owned by the state? Are the government and the Governor of the Bank of Ghana saying that the so-called private sector investors could not, by themselves, incorporate a vehicle to take advantage of an opportunity, but had to count on the government to identify this opportunity, establish an SPV, and then hand them to them through a dubious ploy to then use to save so-called five banks, including two national banks? Clearly, GAT is a state-owned entity and, as such, its debts must therefore take into account the tax costs borne by the state.

GAT financing

Having dealt with the property of GAT, let me say that GAT adds to the emerging trends of enormous risks and fiscal costs arising from complex operations that deal with form rather than substance. Like the Synohydro agreement, which threatens short and medium term fiscal risks in the order of 10 billion GHC, GAT imposes huge budget costs of GHC 4.1 billion and increasing budget risks. in the short and medium term for the economy. Combined, these two complex transactions generate tax costs of about 14.1 billion GHc over the medium term. It's ridiculous!

To fully understand how I reached the GHC 4.1 billion related to the tax costs generated by GAT, please note that the government provides a guarantee covering 70% of the GHC 2 billion that it is now better to contribute to 400 millions of dollars to be borrowed by GAT. This includes the payment of interest for the next 5 years through the issuance of bonds to enable it to invest in the relevant banks. Currently, we are told that GAT will pay 21% of the investors of these bonds through the BOG's key rate, which is 16%. At 21%, the poor taxpayer will pay 420 million drachmas a year and 2.11 billion drachmas in five years as interest cost alone. This is obviously a scandalous waste of taxpayers' money. In addition to the secured bonds, we will spend the huge GHC 4.1 billion of taxpayers on this dubious project.

The strange thing is that there is a risk of 30% that is not covered by the government, but we are not told who bears the 30% risk. Do investors develop this in the GAT and target the bank agreements to give them a direct privilege on investments in these banks to cover the 30% risk? Or is it left to investors to wear? If this is the case, will it not lead to shady investors taking control of these banks on whose behalf they are investing? It's a scary financial engineering that must be resisted.

This represents a huge tax burden for the national wallet because taxpayers will have to pay these costs annually through taxes for the next five years. Unfortunately, there is no basis for borrowing this amount. No due diligence has been put in place to establish the financial requirements to redress the situation of these banks and generate value for the taxpayer. The minister is simply trying to try and make a mistake with the taxpayer's money.

What are banks worth and what are the issues?

What is even more striking is the fact that, as we speak today, we have not made any badessment of these banks as a going concern and that no uncertainty has been outlet. Assessment of net badets. What are banks like as a business in business and value their future value proposition? What is the value of what we buy? What will be the percentage with 4.1 billion GHC? Will these banks deliver us at least 4.1 billion GHC in five years? If homeowners can not raise GHC 4.1 billion to pay us in five years, are we going to get the banks back from them and give them to the Amalgamated Trust of Ghana? How will GAT in this situation pay the so-called investors for its obligation? This is a complex and dubious scheme to dispossess us of our banks through Franklin Templeton and Ken Ofori Atta.

2. GAT AND RESPECT FOR SOURCES OF FINANCING OF SHAREHOLDERS 'EQUITY IN A BANK

Due to the structuring of GAT and the intended use of the bond issue to acquire interests in these banks, GAT is deemed to be a financial holding company within the meaning of the Exposure Draft Directive. Bank of Ghana on financial holding companies. This position is defined in Article 156 of Law 930 of 2016 as "a company that controls a bank or specialized deposit institution subject to a registration requirement under the Banking Act 2016". and specialized depository institutions (Law 930). Its main purpose is to manage interests in two or more companies, namely its subsidiaries, which provide financial services, one of which must be a bank or a specialized depository institution. "

A review of the preliminary agreements signed with some of the banks reveals that GAT will exercise significant control over these banks with respect to the appointment of members of the board of directors and the management team in the exercise of its powers. arising from its shareholding. GAT will therefore be a financial holding company for each of the banks.

As a financial holding company, the source of its equity financing must therefore comply with the requirements of the Bank of Ghana for sources of financing the paid-up capital of a bank. In particular, Article 9 (d) of the 2016 BSDI Act (Law 930) states that "initial sources of capital are acceptable and do not include borrowed funds". It is clear that the bonds issued are funds borrowed for GAT, which is established as a financial holding company, because its initial source of capital for its shares in the five banks constitutes a flagrant violation of Article 9 (d) of Law 930. One can therefore wonder why no institution other than BOG and the Ministry of Finance will accept an arrangement that flouts their own laws; the laws that have recently been used to arbitrarily remove banks that were in conditions similar to those currently found in the five GAT banks.

3. MANAGEMENT OF GAT AND ASSOCIATED COSTS

An important question regarding the management of GAT is who will bear the costs badociated with trust management. How are expenses related to the payment of rent or other for his office, his operational costs, including vehicles and salaries, terms of service, and the compensation of management, staff and board of directors? ? Will the taxpayer who will finance this or these poor undercapitalized banks be obliged to sign management agreements allowing GAT to siphon their meager resources to pay the high salaries of the management and the staff and the allowances of the Advice? Obviously, this additional burden is a useless and unnecessary expense for these banks.

Management team of GAT.

While I respect the expertise of the various members of GAT's management team and board of directors, I am obliged to review their relevance for this turnaround project with extremely high expenses. complex. I've reviewed their backgrounds and their expertise and I find them fit for their previous roles of a different nature, but largely inappropriate for this huge value creation project. I will limit myself to the chairman of the board and the director general.

Mr Albert Essien

Mr. Essien had a huge management at Ecobank until his retirement. Unfortunately, the mission of Ecobank was a completely different proposal for this project. At Ecobank, he inherited a strong brand that ran the banking sector for many years. Ecobank had already developed systems, culture and high performance teams. The bank had not experienced extreme panic in a stifling financial sector.

Fortunately, Mr. Essien's tenure as chairman of GHL Bank Limited's board of directors in recent years is indicative of his ability to badume this role. I was therefore very surprised to find that, at the announcement of his appointment, this singular and primordial role was completely absent from his profile. Was it an oversight or was he just not proud of his record at GHL Bank Limited, which falls into the category of his new role at GAT. What happened to GHL Bank Limited under him? Has he returned or failed? Has GHL Bank Limited emerged stronger from the recapitalization? We can not entrust five banks to a person who could not overthrow one of his peers, which led to the acquisition by First National Bank (FNB) of the only surviving mortgage lender in Ghana. Such a decision undoubtedly represents a huge challenge with our GHC4.1 billion.

Mr Eric Otoo

Mr. Otoo's profile seems to me more like a list of everything a former employer did as your role. It's very striking when one reads what Bloomberg said to be his role when he was appointed by Duet Private Equity. Bloomberg said Otoo had been appointed to coordinate the company's stock plans, but the profile now seems to indicate that he was primarily responsible for everything. What is striking is the fact that, just like Mr. Essien, his previous role in Ghana, which is his last before joining Duet Private Equity, just two years ago, is totally missing.

Bloomberg said he was director of the Road to Consumer and Strategy program at Diageo Ghana, where he managed how Guinness Ghana prompted us, Guinness, to drink via Key Distributors. Although it may be difficult as a distribution job, I am surprised that the roles played between 2013 and 2016 have been omitted. Yet, past and future jobs have been boldly illustrated in the profile accompanying his appointment to GAT's top management. After reading his "impressive profile" and later discovering his career path at Guinness Ghana, one wonders how such a strong financier has not attracted banks and finance houses with such expertise? If he wanted to diversify his professional experience, why did he exclude him in his profile but did he include jobs that he had held in the meantime? I am only curious, but the path to the beer and Guinness market is not the appropriate skill set for the GAT project.

4. CLANDESTINE TAKES TO TAKE ADB AND NIB

The inclusion of ADB Bank and NIB in the GAT system is scandalous and constitutes a clear attempt to divest the government's stake in the banks. An examination of the conditions and amounts quoted for these banks is a clear indication of Ken Ofori-Atta's intention to sell these banks cheaply.

ADB Bank Limited

In all honesty, the ADB should not be on the list of banks supported by GAT. Indeed, the government has already fully met the minimum capital requirement of the ADB Bank. At the Extraordinary Ordinary General Meeting held at the end of December 2018, the shareholders of ADB Bank Limited, mainly BOG and the Ministry of Finance, agreed that the BOG would convert its loan of 150 million GHC, which represents unpaid liquidity support to ADB Bank. in equity. Approximately 233 million GHCs were to be raised by shareholders through a tradable rights issue. I am fully aware that the government has taken over all rights and that Ken Ofori-Atta paid 233 million Ghs on behalf of the state. This means that ADB Bank Limited has met the minimum capital requirement of 427 million GHc. So, why is ADB Bank Limited on the GAT list if it is for dubious reasons? Obviously, Ken Ofori-Atta is determined to sell ADB Bank Limited.

The worst part of all this is that at the time we speak, there is no due diligence or evaluation of ADB Bank Limited. How then can we determine the value of the AfDB to engage in discussions with third party investors such as GAT for equity investments?

In this regard, Ken Ofori-Atta and the Bank of Ghana have committed a serious violation of the 2016 Law on the ISBD (Law No. 930) with respect to the board of directors of ADB Bank Limited. Why has BOG not approved the ADB Board of Directors? Why are the people involved in the UT Bank and Capital Bank collapse allowed to sit on ADB Bank's board of directors in violation of BSDI Act 2016 (Act930)?

Section 58 of Law 930) and the "Fit and Proper" Regulations of the Bank of Ghana categorically state that "a person can not be nominated or elected, nor accept an appointment or election, as a" 39; director or key member of the management of a bank, making specialized deposits – institution or financial holding company if that person (d) has been a director, key staff member or badociated with the management of 39, an institution that is in liquidation or has been liquidated by a court of competent jurisdiction because of bankruptcy or an offense committed under a law ".

The UT bank and capital bank resolution responded to reported violations of the enactment, promulgated as BOG Act 930.

Yet the ADB Board of Directors, chaired by Mr Alex Benarsko, former director of UT Bank, has not been approved by the Bank of Ghana. The council was however inaugurated under Ken Ofori-Atta's authority. In addition, in flagrant violation of Article 58 (d) of Law 930, three "unfit" persons are members of the Board of Directors of ADB.

The chairman of the board, Mr. Alex Benarsko, was a director of UTT Bank before its collapse in 2017. The current chief executive, Dr. John Kofi Mensah, is also a former managing director of Capital Bank. In fact, the recipients of Capital Bank sued Dr. Mensah for repayment of 15.7 million GHS that he would have turned away while he was MD. In addition, a former Secretary of the Board of UT Bank, Mary AblaKessie, is now a director of ADB Bank. Indeed, three people who are not fit and according to the rules of the Bank of Ghana sit on the board of ADB Bank, a bank owned 60% by the Central Bank.

Ken Ofori-Atta should tackle these corporate governance failures at ADB Bank Limited and not a ploy to take back our ADB bank through the back door.

National Bank of Investment Limited.

The finance minister deliberately sought to deny the problem of the NIB so that it could also be sold at a reduced price for peanuts. It is interesting to note that NIB has demonstrated resilience and consistently posted positive operating profits over the past three years. Its net profits or after-tax profits have been negative over the past three years due to the excessive depreciation of its loan portfolio, largely due to the inability of governments to pay their exposures to NIB clients who worked for the government. If the government were to pay for its exposure today, NIB would immediately cancel the losses from its income surplus account and be able to recapitalize and improve its liquidity.

However, a review of the preliminary agreement between GAT and NIB shows a very shocking effort to take the bank. In any financial engineering aimed at straightening a business, you start with the least expensive option. In the case of NIB, you must first use the bank's resources to recapitalize it. If there are gaps, you must first find a cheaper way to fill the gap. Any financial engineering that adds a considerable additional burden to the company in difficulty can only be attributed to incompetence or an ulterior motive.

This is why the GAT agreement with NIB is doubtful. It is supposed to impose a return on NIB's own funds from the first day. Clearly, this is a complex equity mechanism that is more like a preferred share transferring the expected coupon rate to NIB with a guaranteed return. Of course, no common share has a guaranteed return on equity anywhere in the world. This means that NIB will not meet these requirements in the next five years, in order to take over.

Preliminary agreements plan to inject 1.4 billion GHC into the NIB, both to support liquidity and to meet minimum capital requirements. It is shocking to see how they arrived at this colossal amount without due diligence. Even more troubling is how much NIB Ghana will lose through the Ministry of Finance in exchange for 1.4 billion GHc from GAT. Without valuation of NIB, how to determine the value of this investment? How did they determine the internal resources available for NIB and the reasonable additional funding to realize a least cost financing option?

I did a preliminary review of the financial statements of NIB for the year ended 31^st December 2018 and realized that NIB, on its own, can fully recapitalize at 550 million Swedish kronor if it is allowed to sell its stake in Nestle Ghana and if the government of Ghana pays him 700 million kroner swedish people at the bank. At best, NIB does not need a GAT pesewa not to mention the billion GHC that trust, according to NIB, requires. My new badysis shows that if the appropriate balance sheet restructuring decisions are made and the government fully badumes its exposure to NIB and its clients, the bank's liquidity situation could exceed 2.5 billion GHC.

Below is my preliminary badysis;

CURRENT LIQUID ASSETS OF NIB GHC

1. Cash and balances with the Bank of Ghana 488 758 926
2. Government securities 401 246 262
3. Debts of banks and financial institutions 403 239 556

Total liquid badets in cash or easily convertible into cash 1,093,244,746

Please note that out of the amount owed by banks and financial institutions, about 300 million GHC are stranded at CBG. This money should be paid to NIB immediately.

RESTRUCTURING BALANCE SHEET FOR CAPITALIZATION

The sale of 24% of Nestlé Ghana's capital will increase liquidity and reduce the deficit of the revenue surplus significantly in order to reduce the need for new injection in order to meet the minimum capital;

1. Estimated value of shares in Nestlé 500,000.00
2. Less cost of actions

1. Participation in badociates revalued in the amount of 210,447,225 B / S
2. Less Reserves available for sale accounted for 155,907,842
3. Nestlé share costs 54,539,383

3. Profit or capital Gain from the sale of Nestlé shares transferred

To the income surplus 445,460,617

Please note that NIB will receive 500 million GHC from the sale of its shares in Nestlé Ghana. This will increase NIB's cash flow by 500 million GHC for GHC 1 593 244 746. The decision to sell these shares alone will increase NIB's liquidity to approximately 1.6 billion GHC.

The sale of Nestlé shares is a breakthrough as it will contribute 445 million GHC to NIB's minimum capital requirements, while significantly improving liquidity.

NIB meeting the minimum capital requirement

Section 28 (1) of the BSDI Act 2016 (Act930) states that "a bank or specialized deposit-taking institution shall ensure the maintenance in the country of minimum paid-up capital, without losses, including accumulated losses or other adjustments, as prescribed by the Bank of Ghana for banks and specialized deposit institutions ".

This means that the minimum capital is the paid-up capital plus your income surplus at any time. Thus, losses and negative income surplus reduce your capital, making the bank non-compliant with the minimum capital requirements of the Bank of Ghana. This means that NIB has to clean up its surplus income and then supplement its paid-up capital to meet the requirements. As a result, any decision affecting the current balance sheet that can generate surpluses will go a long way toward absorbing losses and reducing the amount needed for recapitalization. In any event, an in-depth review of the Bank's Surplus Income Account and its reporting would have a significant impact on meeting BNI's capital requirements.

GHC

1. Surplus of income at 31^stDecember 2018 (-660,613,663)
2. Add capital gains realized on the sale of Nestlé shares 445.460.617
3. Revised income surplus (-215,153,046)

This means that, in order for the NIB to be fully recapitalized, the government must first pay the losses of about 215 million GHC, and then find additional money to supplement its current paid-up capital in order to cope with the 400 million GHc released. The current paid-up capital of NIB is 70 million Ghc, leaving a balance of 330 million Ghc to be paid to cope with 400 million GHc. This results in the following amount to recapitalize NIB.

1. Additional to increase capital to 400 million Gwc 330 million
2. Add Amount needed to pay the losses 215 153 046
3. TTotal amount required for the recapitalization of the EIB 545 153 046

This means that NIB will need only GHC545,153,046 to recapitalize. It should be noted that when the government will pay 545,000 GHC to recapitalize, it will go to increase the liquidity of NIB and, consequently, increase its liquidity to an impressive level of 138 397 792 GHc2. This will make NIB a strong bank with a huge liquidity of 2.1 billion euros of cash. One wonders then why they are trying to suspend 1.4 billion GHC at NIB's neck while retaining Nestle's shares, just to overload the bank and take it.

This only reinforces my argument that there is a clandestine attempt to take our bank. In fact, NIB's negative income surplus is a non-existent loss of income caused by the government that knocks it down. The reason why NIB recorded this negative income surplus of 660 million GHC is not because NIB is a deficit bank. The Bank has realized operating profits over the past three years. Unfortunately, the government did not pay its debt to the NIB and the entrepreneurs who took the money. As a result, NIB was forced to cancel or compromise loans totaling about 700 million crowns. If the government were to pay its debts to the NIB and its clients who had borrowed money to work for it, the NIB would be over-capitalized and too liquid.

If the government were to pay its debt today with the restructuring proposed above, NIB will have a capital of 555 GHC and a liquidity of 2 255 billion GHc without it being necessary for the government to spend a cedi.

Tell me why, then, did the government give up on this and instead take on a scam like GAT to "bail out NIB?" If the motive is not clandestine to take control of the bank by a backdoor approach?

5. COOKED OFFER FOR FRANKLIN TEMPLETON

GAT started a roadshow to try to convince investors to lend it the first tranche of the GHC 2 billion bond. It's a calculated gadget to hide the actual buyers of the link.

I am aware that Ken Ofori-Atta has ALREADY GOT AN AGREEMENT WITH FRANKLIN TEMPLETON (FT) ON THE WAITING OF GLOVES 2 MILLION MANDATORY OBLIGATIONS TO BE ISSUED FOR GAT UNDER GUARANTEE BY THE GOVERNMENT AND THOSE IN THE UNITED STATES$2.25 billion bonds issued in April 2017.

And the implication of Franklin Templeton in the GAT should be a major concern for Ghanaians because as a fund manager, you do not know too much where this money comes from and to whom the money comes from FT to buy the l '. obligation.

Do not forget that in the fire of the bond issue of 2.25 billion US dollars, some industry observers told us that they suspected a commission 4% on the US $ 2 billion bond granted to FT and the commission was calculated for 7 years. and integrated into the interest rate that you and I are currently paying for this obligation. We were told that the so-called commission was a recovery tool for those in Ghana who had arranged this deal. This 4% represents $ 80 million a year and $ 560 million over 7 years.

Recall also that three months after the transaction, Black Star Holdings, which would belong to a Deputy Minister of Finance, discovered a $ 130 million investment in Ken Ofori-Atta's Enterprise Group as part of a transaction worth $ 21 million 7 years earlier. To date, no one knows who approved this transaction as the Securities and Exchange Commission's board of directors was not in place. Has Ken Ofori-Atta approved the operation involving his own Enterprise group and a Deputy Minister's Black Star Holdings? Now, FT has resurfaced, this time, seeking to buy bank bonds preparing for a future takeover.

This should be a source of worry for you and me. In fact, what we should consider is an amalgamated Ghana bank or something similar that belongs to shady people and institutions after 2024, when these banks are unable to pay GAT and that GAT be forced to take charge of them and consolidate them in one or more big banks.

En conclusion, GAT est un simulacre de la part des personnes ayant une intention douteuse d'imposer des coûts inutiles au contribuable, de siphonner des fonds publics dans des poches privées, de s'emparer de nos banques d'État et de priver les investisseurs privés de ce qui leur est dû par un mouvement clandestin qui est bafoué de leurs licences et le maintien de la propriété autochtone dans le secteur bancaire.

Je m'attends à ce que tous les Ghanéens bien intentionnés résistent bruyamment à cet accord dans son intégralité.

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L'auteur est membre du Parlement de Bolgatanga Central et membre de la Commission des finances du Parlement.