How government uncovered fraud in PDS-ECG takeover deal

Tue, 6 Aug 2019 Source: abcnewsgh.com

ABC News has gathered information on how government’s quest to ensure a smooth running and efficient energy sector, led to the timely halt in the concession agreement between Power Distribution Services and the Electricity Company of Ghana.

ABC News can report that even though the takeover of ECG by PDS took effect on March 1, 2019, not all processes had been exhausted, thus, there was continuous evaluation of the process by government.

It has emerged that the basis for government’s announcement on July 30, of its decision to suspend the contract between PDS and ECG, was arrived at as a consequence of a thorough evaluation done.

Some elements within the opposition believe government’s posture of not considering their views prior to the commencement of the deal contributed significantly to this situation alleging that the government failed to conduct the necessary due diligence.

However, a document sighted by ABC News and signed by Kojo Oppong Nkrumah, Information Minister, stressed “We reiterate that this breach was discovered by the due diligence of the Ghanaian authorities through ECG and with the support of state agencies.”

Per the information contained in the document issued by the Information Minister, the Qatar company which provided the guarantee for the PDS to enable them carry on with the transaction initially confirmed their participation in the process.

This confirmation, upon further checks by government, turned out to be false suggesting possible fraudulent activities by some persons on the PDS-AI-Koot side of the deal.

Additionally, evidence of the continuous due diligence and close monitoring of the progress of the contract by government is witnessed as even the transaction advisers, who were supposed to supervise the deal and takeover process, failed to spot the irregularities until the Akufo-Addo government drew their attention.

Below are the exact details of how government’s keen appraisal of the process resulted in the uncovering of the suggested fraud as submitted by Kojo Oppong Nkrumah in the document:

A. For the avoidance of doubt, the provision of the payment guarantee has always been a condition precedent and was never changed to a condition subsequent as being speculated by some persons.

B. Initial Due Diligence led by the transaction advisers did not detect anything wrong with it.

C. The second level checks (this time led by the Ghana side) initially yielded a response from Al-Koot confirming the guarantee.

D. It was a third level check by the Ghana side that detected anomalies within Al-koot thereby triggering a fourth level check.

E. The fourth level check involved sending an initial team from the Ghana Mission in Qatar to engage with Al-koot officials for further verification. This fourth level further proved the anomalies and suggested untoward action which is now the subject of the full scale inquiry.

At the moment, ECG has reverted to handling full operations of the bulk purchase and distribution of power to the final consumer as further investigations are conducted.

The document further stated that “the full scale inquiry into the detected breaches has commenced and is expected to be completed within 30 days. The team conducting the inquiry comprises insurance investigation experts, officials of the Energy and Finance ministries and officials of the ECG and MIDA as well. The inquiry will determine the nature of the breaches and advise on suggested next steps.”

Source: abcnewsgh.com
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