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PDS scandal haunts govt: Akufo-Addo’s silence on gargantuan fraud 1-year on raises curiosity

President Akufo Addo In Sad Mood President Nana Akufo-Addo

Mon, 17 Aug 2020 Source:

President Nana Dankwa Addo Akufo-Addo is coming under an intense and ever rising pressure from anti graft bodies and a section of the public demanding full disclosure of actions taken after investigations into the botched fraud involving the concessionaire agreement that handed over assets of the Electricity Company of Ghana, (ECG), to the Power Distribution Services (PDS).

It is four months to general elections and a rather sensitive time for the President to be seen as shielding perceived corrupt deals within the government he leads, especially when it involves persons publicly known to be close to him.

The rising calls for full disclosure follows the loud silence, a year on, after President Nana Akufo Addo’s own personal pledge to investigate the matter in the wake of public outcry following revelations in leaked documents, which was further fuelled by conflicting statements from government officials, which sparked suspicions about high profile involvement.

This was after viral reports of a supposed telephone conversation involving persons close to the President and Philip Ayensu who was a board member of PDS and his biological brother Edward Akufo-Addo, also known as Bumpty, on the shareholding structure, became topical news.

Days after the public begun scrutinizing the transactions, the President left the country to Angola, a trip which critics suspected was also used to engage other stakeholders on how to handle a clear looming scandal.

Addressing the Ghanaian community in Angola, precisely on Thursday, August 8, 2019, President Nana Addo Dankwa Akufo-Addo, admitted the scam and gave an assurance to the public that there would be total transparency.

“It turned out that there are problems with this guarantee. Subsequently, we discovered that some of the financial instruments put in place were not in order…and we decided that the first thing to do was to protect the public assets by suspending the agreement and return ECG’s assets whilst a process of investigation was being carried out.

“They (referring to the Ghanaian delegation) had met them (Al Koot Insurance and Reinsurance). They are on their way back. By the time I get back to Accra tomorrow (Friday), we will know exactly where we are,” he told his audience.

One year down the line, government has been strangely silent on what critics describe as one of the biggest corruption scandals in Ghana’s history.

The public concern follows reports that over GH¢1.5 billion paid to the defunct PDS in the form of electricity bills from March 1, 2019 to October 18, 2019 when the concession agreement was in force, has not been accounted for.

It is also public knowledge that PDS used part of this amount, about US$11.25 million to finance the Insurance Guarantee from the Qatar-based Reinsurance company, Alkoot, which was later found to be fraudulent and invalid.

Besides the criminal implications of the well planned attempt to shortchange the state, Ghana also lost a colossal sum occasioned the abrupt termination of the whole MCC Ghana Power Compact by the US government, which subsequently withdrew the second tranche of US$190 million (equivalent to GH10 billion).

Earlier attempts by a high powered government delegation, led by Finance Minister, Ken Ofori Atta, Foreign Affairs Minister Shirley Ayorkor Botchway, Deputy Attorney General Godfred Dame, Energy Minister John Peter Amewu among others) who flew to Washington DC for a closed-door meeting at the State Department, had failed.

Big Names Pop Up

Insiders say, the US government which was privy to the scam and had a delegation led by Speaker of the House of Representatives, Nancy Pelosi had not been in Ghana to send a strong signal, the issue would have been swept under the carpet.

Some of these personalities are not official government appointees. But public interest on their complicity stems from alleged leaked documents.

One was screenshots of text messages from a page dubbed, “Thriller in Manila” where the discussion centers on the need for a Special Purpose Vessel, SPV, role of the Phillipinos, the President’s supposed expressed interests, transparency in drafting the shareholder’s arrangement with Manila Electric Co. (Meralco) which was part of, to take over the Electricity Co. of Ghana (ECG).

Pursuant to amendments by the Vice President Dr. Bawumia, the Finance Minister, Ken Ofori-Atta, and the Eson Benjamin-led MIDA, PDS subsequently provided an Insurance Guarantee to ECG, as same was described as fraudulent by Alkoot, the Qatar-based Reinsurance company which purportedly issued the said Insurance guarantee.

Meralco was part of the consortium called PDS Ghana Ltd., which had been awarded a 20-year concession to take over the operation and management of ECG.

It used to have a 30-percent stake in the consortium prior to the termination.

PDS is a consortium between Meralco through Meridian Power Ventures Ltd., AEnergia SA, an Angolan company, and three Ghanaian firms—TG Energy Solutions Ghana Ltd., Santa Power Ltd. and GTS Power Ltd.

Pursuant to these scandalous amendments by the Vice President Dr. Bawumia, the Finance Minister, Ken Ofori-Atta, and the Eson Benjamin-led MIDA, PDS subsequently provided an Insurance Guarantee with dubious validity to ECG, as same was described as fraudulent by Alkoot, the Qatar-based Reinsurance company which purportedly issued the said Insurance guarantee.

Again the FTI investigative report commissioned by MIDA at the instance of the US government, found that PDS could not even raise the needed funds from equity contributions of shareholders to pay for the so-called Insurance Guarantee it claims to have secured from Alkoot such that, out of the $12.25 million that was charged by Cal Bank to PDS as fees for raising the “fraudulent” Guarantee, only $1 million (8%) was funded by an equity contribution by a PDS shareholder, Philip Ayensu of TG Energy Solutions; $7 million (57%) was funded by a loan that was advanced by Cal Bank to another PDS shareholder, Santa Baron. However, this loan was repaid from operating cash flows, i.e electricity bills collected by PDS after the transfer date.

The balance of $4.25 million (35%) was also paid directly from operating cash flows generated by PDS after the transfer date.

In all, experts estimate that Ghana has lost about US$1.8 billion as result of which the largest opposition party, NDC describes as greed and avarice of President Akufo-Addo’s appointees and their circle of friends who sought to appropriate the GHS20 billion assets of ECG in a style not in the best interest of the state.

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