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Databank not Eurobond transaction advisors – Ministry of Finance clarifies

Ministry Of Finance New Building Reception of the Minstry of Finance | File photo

Fri, 19 Aug 2022 Source: www.ghanaweb.com

The Ministry of Finance has formally reacted to claims that Databank - a company founded partly by Finance Minister Ken Ofori Atta - was acting as transaction advisors to government's activity on the capital markets.

A Ministry statement dated June 1, 2021 clarified that contrary to reports that Databank and Black Star brokerage - a company founded by a former deputy Finance Minister, Charles Adu Boahen - were handpicked to work on Eurobond issuances; the two companies and others associated with the bond floatation were picked on merit.

Databank, Black Star Brokerage and seven other companies are players in the second-tier of the Eurobond issuance business and are known as Bond Market Specialists whereas the main companies are referred to as 'Primary Dealers.'

“The selection of the Primary Dealers [PDs] and Bond Market Specialists [BMSs] is an automatic process based on market performance and historical secondary market trading activity which is publicly available and cannot be manipulated by the Ministry of Finance [MoF] or the Bank of Ghana [BoG]”.

“Since 1996, the Ministry of Finance with the Bank of Ghana has developed and implemented various policies which affect the issuance and trading of Government of Ghana debt securities (Treasuries and Bonds).

"The ultimate objectives of these policies are to develop an efficient fixed income market, strengthen the capacity of local institutions and deepen financial intermediation”, the statement added.

Among other clarifications, the statement also explained why conflict of interest situations do not arise despite known links of the Finance Minister and Charles Adu-Boahen to Databank and Black Star Brokerage respectively.

It explained that both men are no longer serving in any active capacity with the two firms, Ofori-Atta resigned as far back as 2014 and has transferred all his interests to a holding company whiles Adu-Boahen also left all interests after his appointment in 2017.

Recent critique of Ofori-Atta and Databank's alleged 'Eurobond gains'

Veteran broadcaster, Kwasi Kyei Darkwah, known as KKD, is the latest critic of Ken Ofori-Atta's alleged conflict of interest position in government's Eurobond transactions.

According to him, the minister is benefiting at the expense of the country.

“I read a report yesterday that broke my heart, I saw how much Ghana owes but I also found that apparently, the minister of finance’s company or former company is a transaction advisor to the monies that we borrow. So as Ghana gets poorer, the minister of finance’s company or former company gets richer,” he stated when he appeared as a guest on GTV’s Breakfast Show programme.

Describing the situation as unacceptable, KKD accused parliament of also failing to defend the interest of the country by allowing such a practice to fester.

“Is this how we want to continue in this country? Do we want to elect people into office, give them their pay and their perks and then allow them and their friends and their companies or their former companies to be the very beneficiaries of the woes of our country?

"This is not only about the finance minister of finance; this is about parliament. Parliament, you must be ashamed of yourself.

"You have failed the people of Ghana because I don’t think from the time of Nkrumah to date, whoever is the minister for finance should be benefiting every time our country goes to borrow money. Is that what happened?’’ he questioned.

He further bemoaned how Ghanaians including parliament have rather become comfortable with the situation.

“And parliament thinks it is okay? So whoever wins the next election will also set up their own companies and be the transactional advisors when we go and take a loan. What is wrong with us as a people?. So the person’s motive for even going for a loan for me now is not clear because every time we take a loan their company makes money. Does this make sense to us as a people?

“Look we have leaders of the industry, some who have been deprived of their finances and in the meantime, the people who are sitting in power are stealing us blind and all people can tell me is oh this is general knowledge,” he fumed.

Source: www.ghanaweb.com
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