Business News of 2013-12-02

BoG governor’s comment in poor taste – Awuni

The Executive Director of the Centre for Freedom and Accuracy, Andrew Awuni, has taken a swipe at the Central Bank Governor, Dr. Kofi Wampah, whose comment suggested that the possible sale of Merchant Bank to Fortiz equity firm is not dependent on whether the transaction is profitable or not.

Mr. Awuni, who is challenging the sale of Merchant Bank to Fortiz, condemned the comments at Accra High Court, noting that the Governor’s language was poor in taste. “The language that he chose to use in speaking on this matter, I thought, was very much unlike public servants.

“We are not blaming the Bank of Ghana or Dr. Wampah for the paltry sum of GH¢90million that Fortiz is paying for 90 per cent of Merchant Bank. We don’t understand why the Bank of Ghana appears to have bent backwards over, setting aside all the criteria that we know are on the books to make sure that Fortiz get this deal across” he noted.

He was, therefore, curious as to why Fortiz spent only two months to get the deal through, noting that the Bank of Ghana is now asking Fortiz to present a business plan for Merchant Bank. “Dr. Wampah had to answer the question why he decided to make such an important statutory requirement, post-approval activity”, Mr. Awuni asserted.

He was speaking to the media shortly after the court adjourned the case to December 5 to enable SSNIT, a majority shareholder in Merchant Bank, to enter an appearance in an application filed before the court.

The Centre for Freedom and Accuracy has filed an application before the court, seeking an injunction on the sale of Merchant Bank to Fortiz, a Ghanaian Equity firm after it has filed a legal suit challenging the sale of the Bank. Meanwhile, Elder statesman, K.B Asante, was in court to give support for the action taken by the Centre for Freedom and Accuracy.

Mr. Awuni was full of praise for the retired diplomat. “K.B. Asante came here to exemplify exactly what we are talking about”, Mr. Awuni noted, arguing that investments accruing from the Merchant Bank into the SSNIT fund was what was being given as pay for pensioners such as the retired diplomat, some of whom receive as little as GH¢60 a month.

Critics have described the Merchant Bank sale as a fraudulent deal since Fortiz does not have the required capital to turn around the fortunes of the ailing state asset.

State pension fund manager recently issued a statement explaining, among other things, that the deal with Fortiz went through following the willingness of Fortiz to immediately recover at least 30 per cent of Merchant’s debts, while they work clearing the remaining 70 per cent.

But the Executive Director of the Centre for Freedom and Accuracy noted on Metro TV’s Good Evening Ghana on Tuesday, November 27 that “First Rand wanted to treat the bad debt of Merchant Bank separately…so that it does not interfere with the first capital injection into Merchant Bank”.

“Rand Bank was prepared to finance the recovery of the bad debt. Rand Bank offered to pay all the salaries…all the administrative cost for the recovery. Rand Bank was prepared, upon the advice of the Bank of Ghana, to hire UT [Collections], together with existing shareholders, to recover the monies…that is what is in the books”, Mr. Awuni further told show host, Paul Adom Otchere.

Mr. Awuni also refuted claims that the Merchant Asset Recovery Fund, created to collect Merchant Bank’s loans, already separated the bank from the loans, a move First Rand had requested.

“If it was true that Merchant bank had already taken care of the debt, and the debt is no longer part of the bank, then why are we discussing the debt’’?, he quizzed, believing that SSNIT’s deal with Fortiz was not value for money.