Telenor Was Paid ?5.28 Billion For Plan

President John Agyekum Kufuor and his New Patriotic Party (NPP) government have entered their year of Zero Tolerance for Corruption is likely to be tested with how he deals with the Norway?s Telenor Management Partner (TMP) on Ghana Telecom (GT).

Notwithstanding statements by the minister for communications, Felix Owusu-Agyepong that the agreement is in Ghana?s interest, increasing evidence available to The Dispatch indicates that the Telenor Agreement smells so badly that no amount of dressing can deceive Ghanaians.

The latest shocker is that Telenor was paid US$600,000 (?5.28 billion) for the business plan. Many leading members of the agreement have been shocked at this. The first point of possibility of foul dealings was the payment of the $600,000 for the business plan.

When Mr. Owusu-Agyepong was asked how much was paid for the plan on the Metro TV programme, Good Evening Ghana, his answer was; ?I will not tell you.? When pushed further whether $600,000 was paid, the minister replied ?no comment.?

A couple of highly placed members of the government were shocked that any amount was paid at all for the business plan. One expressed his disgust, ?TMP?s selection was based on its business plan. Then we might as well have advertised for companies to use Ghanaians to run Ghana Telecom.?

An official at the Presidency also conceded that his colleague, Minister for Communications, has been unfair in comparing the Telenor Agreement to the one with Telekom Malaysia. He was frank, ?the Telekom Malaysia agreement was bad but to use that as a benchmark is ridiculous, just ridiculous.?

Whilst Mr. Owusu-Agyepong kept saying that he was not prepared to reveal certain details of the agreement because GT was a limited liability company, he forgot to explain why the Agreement was not between the GT Board and TMP but rather the Ghanaian government and TMP.

Whilst Section 10.2 states that on the termination of the Agreement for any reason whatsoever, GT, would within 30 days, cease to use TMP?s intellectual property, section 10.1 states in part that ?TMP shall be entitled to charge royalties to GT on a case-by-case basis,? what many people have been wondering is why a provision was not made for GT to acquire the use of such intellectual property?

The Agreement also talked of funding the roll-out plan through vendor finance, which tends among other disadvantages, to be more expensive and not competitive.

The minister for communications had sought to imply that the media had not cross-checked from TMP but with an 18-page Agreement signed by TMP?s Mr. Christian Erlandsen. Why should one check? Unless, of course, Mr. Erlandsen denies his signature of December 9, 2002. His reference to the repeal of the Criminal Libel Law can only be seen as a smokescreen, without addressing the issues.

The paper published earlier how the agreement with Telenor will cost Ghana a whooping ?2.6 billion a month. Writing under the headline ?Telenor deal is illegal,? the Public Agenda, another local newspaper critical of the agreement writes; ?Following Public Agenda?s story last week that the minister for communications and technology, Felix Owusu-Agyepong is installing Telenor, a Norwegian conglomerate to manage the affairs of Ghana Telecom at a cost in monetary terms twice the wages of the entire 3,900 workforce, the minister has gone on the offensive on FM stations around the capital to state his case.

One of the major reasons he has given for rushing in Telenor is that the 1997 agreement under which Telekom Malaysia came to appoint the Managing Director for Ghana Telecom on behalf of B-Com has the power to determine who manages the company.

Public Agenda's Report

Public Agenda can report that the minister?s position might not represent the facts of the case. The regulations of Ghana Telecommunications Company Limited adopted by a special Resolution dated February 13, 1997 has never been abrogated. It was only amended on June 6, 2002 to give the Government of Ghana being the majority shareholder, to have the right to appoint the Managing Director.
Under the amendment Regulations, ?the holder of the ?A? share (majority) shall be entitled to appoint six directors to the board of the company of which one shall be the chairman of the Board of Directors of the company.
Under (iii) The ?B? shares shall constitute a separate class of shares and shall have the following rights: the holders of the ?B? shares shall appoint three directors to the board of the company who may be executive directors within the meaning of section 192 of the code.
What will be of interest to followers of the whole saga unfolding is clause iv which states: ?That Regulation 70 (3) is hereby amended to read as follows: the following questions shall acquire the approval of not less than six (6) Directors of the company including at least one (1) Director appointed by Class ?B? shareholders.
Under Article 74 of the Regulations dealing with Executive & Managing Directors, the Regulations states: ?Notwithstanding the powers conferred on the head of directors by section 192 of the Code, only the holders of the ?B? shares shall appoint directors to any office or place of profit under the company other than the office of the Auditor for such period and on such terms as they may determine and subject to the terms of any agreement entered into in any particular case may revoke such appointment.
Under clause 75 (1) the ?B? class shareholders shall appoint one or more of the directors to the office of the Managing Director for such period and such term as they may determine and, subject to the terms of any agreement entered into in any particular case may revoke such appointment and such appointment shall be automatically determined if the holder of the office ceases from any cause to be a director.
One disturbing trend in the Telenor saga has been the shifting of the goalpost. The original advertisement placed in national and international media asked for strategic investors who would invest in the expansion of Ghana Telecom lines in two to three years.
A number of organizations were said to have put in bids and Telenor was said to have won the bid. Sources at Ghana Telecom head office told this report that the understanding then was that Telenor had been selected on the basis that the Norwegians satisfied the stringent demand.
By strange twist of events, Ghanaians were told that Telenor were rather drawing a Business Plan for Ghana Telecom for which the state had committed $600,000 of scarce resources. At what stage did the Telenor Plan change and who changed it?
?This is a gigantic fraud on the people of Ghana and the minister and the whole government have constitutional duty to explain the matter in full to the good people of Ghana,? a worker at Ghana Telecom said, fuming with rage. ?Until we pay off the Malaysians, we can?t purport to have replaced them,? the worker added.

President John Agyekum Kufuor and his New Patriotic Party (NPP) government have entered their year of Zero Tolerance for Corruption is likely to be tested with how he deals with the Norway?s Telenor Management Partner (TMP) on Ghana Telecom (GT).

Notwithstanding statements by the minister for communications, Felix Owusu-Agyepong that the agreement is in Ghana?s interest, increasing evidence available to The Dispatch indicates that the Telenor Agreement smells so badly that no amount of dressing can deceive Ghanaians.

The latest shocker is that Telenor was paid US$600,000 (?5.28 billion) for the business plan. Many leading members of the agreement have been shocked at this. The first point of possibility of foul dealings was the payment of the $600,000 for the business plan.

When Mr. Owusu-Agyepong was asked how much was paid for the plan on the Metro TV programme, Good Evening Ghana, his answer was; ?I will not tell you.? When pushed further whether $600,000 was paid, the minister replied ?no comment.?

A couple of highly placed members of the government were shocked that any amount was paid at all for the business plan. One expressed his disgust, ?TMP?s selection was based on its business plan. Then we might as well have advertised for companies to use Ghanaians to run Ghana Telecom.?

An official at the Presidency also conceded that his colleague, Minister for Communications, has been unfair in comparing the Telenor Agreement to the one with Telekom Malaysia. He was frank, ?the Telekom Malaysia agreement was bad but to use that as a benchmark is ridiculous, just ridiculous.?

Whilst Mr. Owusu-Agyepong kept saying that he was not prepared to reveal certain details of the agreement because GT was a limited liability company, he forgot to explain why the Agreement was not between the GT Board and TMP but rather the Ghanaian government and TMP.

Whilst Section 10.2 states that on the termination of the Agreement for any reason whatsoever, GT, would within 30 days, cease to use TMP?s intellectual property, section 10.1 states in part that ?TMP shall be entitled to charge royalties to GT on a case-by-case basis,? what many people have been wondering is why a provision was not made for GT to acquire the use of such intellectual property?

The Agreement also talked of funding the roll-out plan through vendor finance, which tends among other disadvantages, to be more expensive and not competitive.

The minister for communications had sought to imply that the media had not cross-checked from TMP but with an 18-page Agreement signed by TMP?s Mr. Christian Erlandsen. Why should one check? Unless, of course, Mr. Erlandsen denies his signature of December 9, 2002. His reference to the repeal of the Criminal Libel Law can only be seen as a smokescreen, without addressing the issues.

The paper published earlier how the agreement with Telenor will cost Ghana a whooping ?2.6 billion a month. Writing under the headline ?Telenor deal is illegal,? the Public Agenda, another local newspaper critical of the agreement writes; ?Following Public Agenda?s story last week that the minister for communications and technology, Felix Owusu-Agyepong is installing Telenor, a Norwegian conglomerate to manage the affairs of Ghana Telecom at a cost in monetary terms twice the wages of the entire 3,900 workforce, the minister has gone on the offensive on FM stations around the capital to state his case.

One of the major reasons he has given for rushing in Telenor is that the 1997 agreement under which Telekom Malaysia came to appoint the Managing Director for Ghana Telecom on behalf of B-Com has the power to determine who manages the company.

Public Agenda's Report

Public Agenda can report that the minister?s position might not represent the facts of the case. The regulations of Ghana Telecommunications Company Limited adopted by a special Resolution dated February 13, 1997 has never been abrogated. It was only amended on June 6, 2002 to give the Government of Ghana being the majority shareholder, to have the right to appoint the Managing Director.
Under the amendment Regulations, ?the holder of the ?A? share (majority) shall be entitled to appoint six directors to the board of the company of which one shall be the chairman of the Board of Directors of the company.
Under (iii) The ?B? shares shall constitute a separate class of shares and shall have the following rights: the holders of the ?B? shares shall appoint three directors to the board of the company who may be executive directors within the meaning of section 192 of the code.
What will be of interest to followers of the whole saga unfolding is clause iv which states: ?That Regulation 70 (3) is hereby amended to read as follows: the following questions shall acquire the approval of not less than six (6) Directors of the company including at least one (1) Director appointed by Class ?B? shareholders.
Under Article 74 of the Regulations dealing with Executive & Managing Directors, the Regulations states: ?Notwithstanding the powers conferred on the head of directors by section 192 of the Code, only the holders of the ?B? shares shall appoint directors to any office or place of profit under the company other than the office of the Auditor for such period and on such terms as they may determine and subject to the terms of any agreement entered into in any particular case may revoke such appointment.
Under clause 75 (1) the ?B? class shareholders shall appoint one or more of the directors to the office of the Managing Director for such period and such term as they may determine and, subject to the terms of any agreement entered into in any particular case may revoke such appointment and such appointment shall be automatically determined if the holder of the office ceases from any cause to be a director.
One disturbing trend in the Telenor saga has been the shifting of the goalpost. The original advertisement placed in national and international media asked for strategic investors who would invest in the expansion of Ghana Telecom lines in two to three years.
A number of organizations were said to have put in bids and Telenor was said to have won the bid. Sources at Ghana Telecom head office told this report that the understanding then was that Telenor had been selected on the basis that the Norwegians satisfied the stringent demand.
By strange twist of events, Ghanaians were told that Telenor were rather drawing a Business Plan for Ghana Telecom for which the state had committed $600,000 of scarce resources. At what stage did the Telenor Plan change and who changed it?
?This is a gigantic fraud on the people of Ghana and the minister and the whole government have constitutional duty to explain the matter in full to the good people of Ghana,? a worker at Ghana Telecom said, fuming with rage. ?Until we pay off the Malaysians, we can?t purport to have replaced them,? the worker added.