Bond saga: CHRAJ confirms receipt of petition
The Commission for Human Rights and Administrative Justice (CHRAJ) has confirmed it has received a petition to investigate the recent $2.25billion bond issued by the government of Ghana.
Speaking to Emefa Apawu on 505 on Class91.3FM on Thursday 27 April, the Commissioner for CHRAJ, Joseph Whittal, said: “Yes, I can confirm that we…received a petition at 12 o’clock this afternoon.”
According to him the petition is specifically requesting CHRAJ to investigate allegations of conflict of interest and transparency issues with regards to the bond and a number of issues of conduct surrounding Finance Minister Ken Ofori-Atta and Attorney General Gloria Akufo.
Mr Whittal disclosed that the petition does not necessarily mean CHRAJ would have to investigate the matter. “We may not necessarily investigate, it is not as if we have to investigate. We would first assess the content of the allegation and determine whether in this case the mandate of conflict of interest and corruption are properly invoked. If we are satisfied as a commission that we have the mandate to proceed, then we will write to the public officers concerned under the constitution to either admit the allegations or deny them and generally comment on the allegations from that perspective. From there we take it up,” he explained.
The Ashanti Regional Youth Organiser of the main opposition National Democratic Congress (NDC), Yaw Brogya Genfi, petitioned CHRAJ, in his capacity as a citizen of Ghana, to investigate the recent $2.25billion bond issued by the government of Ghana.
Mr Genfi’s petition follows assertions by the Minority in Parliament that Mr Trevor G. Trefgarne, a director at Franklin Templeton, the institution that bought 95 per cent of the bond, is also a Director at Enterprise Group Limited, a company of which Ghana’s Finance Minister Ken Ofori-Atta is co-founder, thus, raising issues of transparency, conflict of interest, and suspicion.
Following the allegations, Vice President Dr Mahamudu Bawumia said the Minority were displaying ignorance about economic issues and asked them to do a little reading to cure their ignorance.
“So they need to understand, maybe they should read a little, but they need to understand what took place: we issued a cedi bond, there’s no secrecy to the matter, it was very well invested in. The holders have invested many times in Ghana in bonds that were in place when Seth Terkper issued them, they bought them, 24 per cent interest rate. This time it is 19%, we are doing even much better, but this is what politics has been reduced to, trying to say things which really have no basis and are basically wrapped in ignorance, and, so, I’m a bit sad for Ghana and for them because they are really demonstrating a lot of ignorance in the process of managing this economy,” Dr Bawumia said.
His comments angered the Minority who demanded an apology. Following the back-and-forth, Mr Gyamfi petitioned CHRAJ saying: “A number of issues of conflict of interest and lack of transparency have emerged from the bond issuance. It is imperative that the Commission on Human Rights and Administrative Justice (CHRAJ) investigates same to protect the national interest as per its mandate under article 218 of the 1992 Constitution of the Republic of Ghana.”
Below is Mr Yaw Brogya Genfi’s full petition:
Read the Full petition:
April 25, 2017
COMMISSION OF HUMAN RIGHTS & ADMINISTRATIVE JUSTICE (CHRAJ), ACCRA
PETITION TO INVESTIGATE CONFLICT OF INTEREST IN THE RECENT US$2.25 BILLION BOND ISSUED BY THE GOVERNMENT OF GHANA THROUGH THE MINSTRY OF FINANCE
On April 3, 2017, the Ministry of Finance announced that the Government of Ghana had issued a 15-year and 7-year bond at a coupon rate of 19.75% each. The said issuance raised a total amount of USD1.13 billion. In addition, the Ministry of Finance raised the cedi equivalent of USD1.12 billion in 5-year and 10-year bonds via a tap arrangement.
A number of issues of conflict of interest and lack of transparency have emerged from the bond issuance. It is imperative that the Commission on Human Rights and Administrative Justice (CHRAJ) investigates same to protect the national interest as per its mandate under article 218 of the 1992 Constitution of the Republic of Ghana.
There is credible information in the public domain as follows:
1. One single investor, Franklin Templeton Investment Limited, purchased almost 95% of the Bond issued by the Minister for Finance. The size of this virtual “private placement” makes it akin to a sovereign bond or foreign loan.
2. The virtual “private placement” approach that was used was opened in the morning and closed in the evening of the same day March 31, 2017.
3. Franklin Templeton Investment Limited is an American global investment management organization founded in 1947.
4. In an unaudited semi-annual report of Franklin Templeton Investment Limited dated December 31, 2016, Mr. Trevor G. Trefgarne was named as one of the Directors of the its board.
5. In the same report, Trevor G. Trefgarne was also described as the Chairman of Enterprise Group Limited.
6. The Enterprise Group Limited is a company partially owned by Data Bank Limited, a company in which the Finance Minister is known to have significant interest.
7. The following are also Directors of the Enterprise Group Ltd. – Dr. Angela Ofori Atta, wife of the Finance Minister, Keli Gadzekpo, business partner of the Finance Minister, Hon. Gloria Akuffo, Attorney-General & Minister for Justice and Hon. Ken Ofori Atta, the Minister for Finance himself.
1. The 7-year and 15-year Bonds were not on the issuance calendar.
2. The initial pricing guidelines of the Bond were issued around 5:37pm on March 30, 2017, by e-mail, which is after normal working hours.
3. The transaction was opened at 9.00am on March 31, 2017.
4. The public announcement of the transaction was sent by e-mail at approximately 9:09am on the March 31, 2017, which means the transaction was opened before the announcement was made to the public.
5. The issuance summary was issued on March 31, 2017, at about 4:20pm by e-mail indicating that the Bond transaction had been closed and announcement made to the public
6. April 3, 2017, was the Settlement Date and not the closing date of the Bond.
1. From the points above, a reasonable person has cause to believe that there is a relational interest between Hon. Ken Ofori Atta and Mr. Trevor G. Trefgarne, who have been described as ‘great friends’.
2. The clear link between the Finance Minister and his friend Trevor Trefgarne, and the sub-links with the Finance Minister’s family and business associates, leads to legitimate questions like
1. did the Finance Minister issue the bond in a manner that would favour his friend, family, associates and/or business partners;
2. was the deal influenced by cronyism, nepotism and corruption.
3. The Bond transaction seems to have been shrouded in secrecy – the process was limited to one day, unlike past bonds where the “book-building” method had been used and the process was opened for a minimum of three days to ensure optimal participation.
4. There is no record available to the effect that the Finance Minister disclosed his relational interest in the transaction.
Please note further
19. On Monday, April 3, 2017, the Ministry of Finance issued a statement announcing that the Ministry of Finance had “successfully issued 15 and 7 year bonds with the same coupon rate of 19.75%, raising a total amount of USD1.13 billion. In addition, the Ministry of Finance raised the cedi equivalent USD1.12 billion in 5 and 10 year bonds via a tap arrangement’ – a copy of the statement is attached marked ‘A’
20. It was reported by Reuters that “a senior government official, speaking on condition of anonymity, said Franklin Templeton had participated in the sale”, and that “Franklin Templeton’s high-profile bond fund manager, Dr Michael Hasenstab has taken a “substantial” position in Ghana’s cedi-denominated government bonds” – a copy is attached marked ‘B’
• On April 18, 2017, the Minority in Parliament held a Press Conference and raised serious questions of conflict of interest, transparency and lack of Parliamentary approval – a copy of the statement is attached marked ‘C’.
1. On April 19, 2017, the Ministry of Finance issued a response – a copy is attached marked ‘D’.
2. On April 20, 2017, the Minority in Parliament issued a response – a copy is attached marked ‘E’
3. On April 18, 2017, the Attorney-General & Minister for Justice on a radio station (Citi FM) indicated that she resigned from the Enterprise Group on April 1, 2017, and that she had no knowledge of the bond arrangement – a copy of the audio recording can be accessed from Citi FM. However, the Ministry of Finance records show that the bond process was opened and closed on March 31, 2017.
• On April 19, 2017, a Deputy Minister for Finance, Hon. Abena Osei Asare, on a radio station (Citi FM – Point Blank, Eye Witness News), indicated that once the Minister for Finance had declared his assets under the Declaration of Assets Act this meant that he had disclosed his interest in the matter – a copy of the audio recording can be accessed from Citi FM. It is, however, trite knowledge that declaration of assets forms filed with the Auditor-General’s Department are confidential until processes are executed that allow for their content to be exposed, and therefore cannot constitute disclosure of interest in this matter.
• On April 20, 2017, the Vice President, H.E. Mahamudu Bawumia, in an interview in Washington DC where he was attending the World Bank’s Spring meeting, described the Minority as ‘ignorant’ but failed to answer the questions raised by the Minority in Parliament on the matter – a copy of the report can be accessed from Graphic Online.
2. On April 21, 2017, Dr. John Gatsi (Head of Finance Department, University of Cape Coast) published an article entitled ‘What is External Borrowing in the context of the issuance of the US$2.25 Billion Euro Bond and Ghana’s Public Borrowing Guidelines’ – a copy is attached marked ‘F’.
Some Relevant Laws, Regulations & Guidelines 1992 Constitution of the Republic of Ghana
“Article 284 – A public officer shall not put himself in a position where his personal interest conflicts or is likely to conflict with the performance of the functions of his office.”
Code of Conduct for Public Officers of Ghana
Public officer shall ensure that their personal interests or activities do not interfere with or appear to interfere with their obligations to serve the state.
Public officers shall not seek or obtain personal or private benefit from the use of information acquired in the course of their official duties.
Pubic officers shall not allow their personal interests, activities or conduct to interfere with or appear to interfere with the performance of their duties/functions.
Public officers shall not put themselves in a position where their personal interest conflicts or is likely o conflict with the performance of their functions/duties.
CHRAJ’s ‘Guidelines on Conflict of Interest to assist Public Officials Identify, Manage and Resolve Conflicts of Interest’:
“2.0 Definition of Conflict of Interest
A Conflict of Interest refers to a situation where a public official’s personal interest conflicts with or is likely to conflict with the performance of the functions of his/her office. In other words, a conflict of interest includes:
1. any interest or benefit, financial or otherwise, direct or indirect;
2. participation in any business transaction, or professional activity;
• an incurring of any obligation of any nature; or
1. an act or omission;
which is or appears or has the potential to be in conflict with the proper discharge of a public official’s duties in the public interest.
Conflict of interest occurs when a public official attempts to promote or promotes a private or personal interest for himself/herself or for some other person, and the promotion of the private interest then results or is intended to result or appears to be or has the potential to result in the following:
1. an interference with the objective exercise of the person’s duties, and
2. an improper benefit or an advantage by virtue of his/her position.”
“Disclosure of Conflicting Interests
Whenever a conflict of interest situation occurs or is likely to occur, the public official must make a disclosure of the situation as provided by law or as follows:
What to disclose : assets and liabilities; gifts, conflicting interests, outside employment, and NGO activities
How to disclose : in writing, verbal, and surrendering the item
When to disclose : as soon as a conflict of interest situation occurs or is likely to occur, and when in doubt
To whom : CHRAJ, superior officer/head of institution, and ethics committee or compliance officer or a similar set up within the institution
“Resolution and Management of Conflict of Interests
Conflicts of interests may be resolved or managed by one or more of several ways, including the following:
1. divestment or liquidation of the interest by the public official;
2. detachment of the public official from involvement in an affected decision-making process;
• restriction of access by the affected public official to particular information;
1. transfer of the public official to duty in a non-conflicting function;
2. re-arrangement of the public official’s duties and responsibilities;
3. resignation of the public official from the conflicting private-capacity function; and
• Resignation of the public official from the public office.”
It seems clear that Hon. Ken Ofori Atta –
• put himself in a position where his personal interest conflicts or is likely to conflict with the performance of the functions of his office;
• attempted to promote a private or personal interest for himself or for some other person, and the promotion of the private interest has resulted or was intended to result in or appears to have resulted in or has the potential to result an interference with the objective exercise of the person’s duties and an improper benefit or an advantage by virtue of his position;
• did not take the proper steps in disclosing his conflicting interests;
• did not resolve or manage his conflicting interests.
Other relevant applicable rules are as follows:
In CHRAJ’s ‘Guidelines on Conflict of Interest to assist Public Officials Identify, Manage and Resolve Conflicts of Interest’, section 3 goes further to identify conflict of interest situations.
“General Rule: A public official shall not participate in an official capacity in any particular matter which to his knowledge:
1. he/she has a financial interest; and
2. any person whose interests are imputed to him in any way has a financial interest; if the particular matter will have a direct effect on that interest.
“A public official shall not take an action in an official capacity which involves dealing with himself/herself in a private capacity and which confers a benefit on himself/herself.
An example of self-dealing is the practice where tender board members bid for public contracts, which the board manages.
“3.3.1 General Rule:
A public official shall not participate in a matter involving specific parties, which he/she knows is likely to affect the interest of a member of his/her family, friend or partner if a reasonable person with knowledge of the facts would question his/her impartiality in the matter.
“Use of Public Office for Private Benefit
General Rule: A public official shall not use his public office for his/her own private benefit, for the endorsement of any product, service or enterprise, or for the private benefit of friends, relatives, or persons with whom the public official is affiliated in a private capacity, including political parties, non-profit organizations of which he/she is an officer or member, and persons with whom the public official has to seek employment or business relations.”
It further seems clear that Hon. Ken Ofori Atta
• has participated in an official capacity in a matter which to his knowledge he has a financial interest and/or persons whose interests are imputed to him have a financial interest;
• has taken an action in an official capacity which involves dealing with himself in a private capacity and which confers a benefit on himself;
• has participated in a matter involving specific parties, which he knows is likely to affect the interest of a member of his family, friend or partner and as a senior public official he should have known that a reasonable person with knowledge of the facts would question his impartiality in the matter;
• has used his public office for his own private benefit and for the private benefit of friends, relatives, and persons with whom he is affiliated in a private capacity.
Several questions must be answered including the following:
• Was a substantial portion of the bond purchased by Franklin Templeton Investments, if so, how much?
• Is Trevor G. Trefgarne a Director of Franklin Templeton Investments?
• Is Trevor G. Trefgarne the Chairman/Director of Enterprise Group Ltd?
• Are Dr. Mrs. Angela Ofori-Atta, Mr. Keli Gadzekpo, Hon. Gloria Akuffo and Hon. Ken Ofori-Atta Directors of the Board of Enterprise Group Ltd.?
• If not, were they Directors of the Board in the immediate past?
• Does Databank Ltd. own part of Enterprise Group Ltd. or any of its affiliates?
• Does Hon. Ken Ofori-Atta have any shares or business interest in Databank Ltd. or did he have any shares or business interest in the immediate past?
• Is Keli Gadzekpo a business partner of the Minister for Finance or was Keli Gadzekpo a business partner of the Minister for Finance immediately before the Minister was sworn in as Minister for Finance?
• Did Hon. Gloria Akuffo resign from the board of Enterprise Group Ltd. and, if so, was this before the commencement of the process of the bond issuance?
• Did Hon. Gloria Akuffo, as Attorney-General & Minister for Justice, have no knowledge of the bond arrangement and, if so, why not?
• Were the initial pricing guidelines of the Bond issued around 5:37pm on March 30, 2017, after normal working hours?
• Was the transaction was opened around 9.00am on March 31, 2017, and closed around 4.20pm of the same day?
• Was the transaction opened before the announcement was made to the public?
• Was the placement method used competitive and transparent or was it “cooked” for one single investor?
• Did the Minister for Finance make full disclosure of his relational interest in the bond issuance either before or during the process?
• Did the Attorney-General make full disclosure of her relational interest in the bond issuance either before or during the process?
• Did the Minister for Finance adhere to the 1992 Constitution, the Code of Conduct for Public Officers of Ghana, CHRAJ’s guidelines on conflict of interest for Public Officers, and other relevant rules and laws pertaining to conflict of interest and issues of corruption?
• Should the Minister for Finance resign or be removed from office?
• Did the Attorney-General and Minister for Justice adhere to the 1992 Constitution, the Code of Conduct for Public Officers of Ghana, CHRAJ’s guidelines on conflict of interest for Public Officers, and other relevant rules and laws pertaining to conflict of interest and issues of corruption?
• Should the Attorney-General resign or be removed from office?
In line with my duties as a citizen of this nation, and in light of the above, I have no option than to petition CHRAJ for an investigation into the matter and the application of the necessary sanctions.
I am confident of your ability to investigate this matter thoroughly, dispassionately and in a non-partisan manner to help us reach a just conclusion.
Yours in the Service of the Nation
YAW BROGYA GYAMFI
CITIZEN OF GHANA
cc H.E. President Akuffo Addo
Flagstaff House, Accra
Rt. Hon. Speaker of Parliament
Parliament House, Accra
Her Ladyship the Chief Justice
Judicial Service of Ghana
The Hon. Minister
Ministry of Finance, Accra
The Hon. Minister
Ministry for Justice &
Attorney General, Accra
Trevor G. Trefgarne
c/o US Embassy, Accra
Securities Exchange Commission
c/o US Embassy, Accra