GH¢2bn GAT: Addison lied – Isaac Adongo

A member of the Finance Committee of Parliament, Isaac Adongo, on Friday, 11 January 2018, accused the governor of the central bank, Dr Ernest Addison of deceiving the public as far as the status of the Ghana Amalgamated Trust (GAT) vehicle which is to be used to shore up the recapitalisation drive of some five struggling local banks, is concerned.

GAT is an arrangement of private pension funds to inject GHS2 billion into supporting solvent and well-run indigenous banks, which had difficulties meeting the new minimum capital requirement of GHS400 million.

The banks are the merged Omni/Sahel Sahara Bank, Universal Merchant Bank, Prudential Bank, ADB and NIB.

The Bolgatanga Central MP's accusation comes in the wake of mounting pressure on the central bank and the government to disclose the real faces behind the GHS2 billion support to the five banks under the GAT arrangement.

Speaking to Francis Abban on Morning Starr, Mr Adongo said the BoG governor has not been sincere about the status of the Trust to the public.

“No pension fund had invested one cedi in any of those five banks. That’s a fact… Ghana Amalgamated Trust was created on the 17th of December 2018, issued with the certificate to commence business the same day. When did they raise the 2 billion and from whom, by 31st December?

“So that’s a complete lie. You know who owns Ghana Amalgamated Trust? National Trust Holding Company (NTHC). Is that the pension funds that he’s talking about? The National Trust Holding Company owns hundred per cent of Ghana Amalgamated Trust, as a nominee shareholder for the government… When they say nominee shareholder, as representing the government and because it’s a nominee shareholder, it doesn’t have to cough up stated capital of two billion,” he said.

Disclosing faces behind GAT will boost confidence

Following the announcement of the package on 4 January 2018, the central bank came under heavy criticism for eliminating some local banks from benefiting from the scheme—an accusation Dr Ernest Addison dismissed as untenable, arguing that the regulator had nothing to do with the selection of the five banks.

Speaking on the Business Edition on Wednesday, Banking Consultant Dr Richmond Atuahene contended that revealing the identity of the sponsors would boost investor confidence in the bond to be issued to raise the GHS2 billion.

“If you want me to issue a bond, who is backing it? Can this institution, the GAT, worth their salt, go into the market and say that: ‘We are issuing this so back us?’ Whatever way you look at it, there are a few fiscal issues.

“If I were going to buy that bond, I would ask: ‘Who the sponsors are?’ You tell me GAT.

Then who set the GAT up? What’s the ownership, the ownership identity? If there’s no ownership identity, it would be very difficult for me to participate in it because at the end of it all, should something go wrong it means I won’t have a fallback position,” he said.