SSNIT, Rock City and Ablakwa’s much ado about nothing

Samuel Okudzeto Ablakwa continues to make headlines with his controversial attack. On account of the decision of the Social Security and National Insurance Trust (SSNIT) to offload 60% of its shares in some six hotels to a strategic investor, it has become utterly necessary for more right-thinking members of the public to answer Ablakwa's affront to free speech and democratic accountability.

Okudzeto-Ablakwa on several occasions had insisted that Rockcity and Hon Bryan

Acheampong engaged in insider dealings, and as such the deal ought to be halted.

But then, it is important, first of all, to establish the fact that the decision by SSNIT to dispose of these hotels was mooted in 2012. The then Director General, Ernest Thompson, assessed the situation and firmed up the decision to bring in a strategic investor to turn around the fortunes of the non-profitable hotels.

Then, in 2018, the then Director General, Dr John Ofori-Tenkorang, concluded that indeed, the six hotels have been draining SSNIT so much so that it has become necessary for a strategic investor to come in. According to SSNIT, these hotels are simply unprofitable and have thus become non-performing entities.

Take La Palm Royal Beach Hotel for instance; it has made losses for eleven (11)

straight years without any dividend whatsoever being paid in all its years of

operation. And its average return on equity is 4.2% (negative 4.2%).

In the case of Elmina Beach Resort, it has made losses in nine (9) years out of the fourteen (14) years it has been in operation. It has never paid dividends in all its years of operation, and its average return on equity is -4.8% (a negative 4.8%).

For Busua Beach Resort, it has made losses in nine (9) out of the 14 years of its operations. It has never paid any dividend in all its years of operation, and the average return on equity is -31.7% (negative 31.7%).

Ridge Royal Hotel has made losses in all the eight (8) years it has been in operation and never paid dividends in its entire operation. The average return on equity for Ridge Royal Hotel is -33.1% (negative 33.1%).

And, oh yes, Labadi Beach Hotel has been paying dividends. It made losses in two out of the fourteen (14) years it has operated. However, the average return on investment was 1.7% between 2012 and 2017 and has averaged 5.2% for the period 2012 and 2022.

So, there you have it. The dire financial situation of the six hotels led to the decision by SSNIT to bring in strategic investors.

As a consequence of this, SSNIT formed a steering committee that included all the board chairpersons of the hotels in question, three (3) board members, and some management and staff of SSNIT to be set up to drive the entire bidding process.

In actuality, A competitive tendering process was prescribed. A Transaction

Advisor was sought through publications in the national dailies as far back as 2018. The advertisement was also done in the international magazine, The Economist, in its January 5–11, 2019, edition.

As of the January 16, 2019 deadline, 15 firms had expressed interest in submitting bids. Six were shortlisted, and approval was sought from the Central Tender Review Committee for the selection of a transaction advisor on December 12, 2019, and the same was granted on December 24.

Again, fifteen (15) entities, including Deloitte and Touche, Standard Chartered Bank, PWC, EY Advisory Services, Cornerstone Capital Advisors, KPMG, and SEM Capital Advisors, submitted bids as transaction advisors.

And an evaluation committee recommended these six firms based on their scores, and SEM Capital eventually won the bid.

SEM Capital, as a transaction advisor, led a consortium of four (4) firms that brought on board legal, asset valuation, and hotel expertise and also guided the selection of a strategic investor.

Then again, advertisements were run for an expression of interest for a strategic investor to partner with SSNIT in the Daily Graphic and Ghanaian Times. The Economist also published it on February 26th, 2022.

In the end, nine (9) companies responded to the advertisement and submitted

proposals by the March 23, 2022, deadline: six firms, Rock City Hotel, Yaw Addo

Development, Spartan-Ives, Temple Investments, Westridge Developers Ghana Ltd., and Luxor Hotels Ltd. qualified after the evaluation process.

In all, Rock City’s bids were higher; Rock City’s bid was $29.4 million for the Labadi Beach Hotel. Next to Rock City was Yaw Addo, $18 million. Luxor’s bid was $9.4 million.

Additionally, Rock City’s bid was $21 million for La Palm Royal Beach Hotel, Yaw

Addo bid $13.2 million; Luxor had $5.9 million.

It is remarkable that Rock City topped all the entities in the other hotels, and its bid for Labadi Beach Hotel and La Palm Royal was more than the combined bid of the other two bidders. It was also higher than the recent price valuation for 60% of the hotels.

Additionally, Rock City’s bid for the Ridge Royal Hotel and Elmina Beach Resort was the only bid received, and it was more than the recent price evaluation of 60% of the hotels.

Interestingly, Okudzeto Ablakwa has conveniently ignored all the relevant details, and he's out there making public spectacles of his personal grudges.

At another glance, the proposition by Okudzeto Ablakwa that there is a conflict of interest ripped through the entire process as a result of Hon. Bryan Acheampong's current position as cabinet minister and his beneficial interest in Rockcity might sound like the sort of blatantly implausible jealousy-driven claim that is not even worth checking out. But anyone who does check it out will find that it is truly the case.

Let's emphasise the fact that Hon. Bryan Acheampong was not a cabinet minister when Rockcity submitted the bid as a strategic investor for the SSNIT hotels. The submission of bids took place as far back as 2022, a time when Hon. Bryan Acheampong was not a minister, let alone a cabinet minister.

This is it, yet in a flurry of cowardice, narcissism, brazen contempt for the truth, and baseless accusations, we are witnessing a member of parliament calling a fellow member of parliament all sorts of names simply because he dared to be different.

Yes, Bryan Acheampong has been called everything from a man abusing his office to a nation wrecker through to a ruthless politician by the likes of Okudzeto-Ablakwa who don't like him.

Meanwhile, Bryan Acheampong was never conflicted in any way or shape looking at

the rigorous and thorough bidding process that ensued.

In actuality, the figures show Rockcity proposed the highest bid for the six hotels, and there's absolutely no reason why anyone in his or her right senses would raise a query about the process. And instead of asking Okudzeto-Ablakwa to revise his notes, he keeps doubling down on his mendacity and repeated eccentricity.

Honestly, while I sympathise that Okudzeto Ablakwa does not live from measured,

realistic reflection, it would be nice if the public understood that his so-called public manifestation is all jealousy-induced.

Let’s say it loud and clear: Okudzeto Ablakwa has a simplistic, binary view of our politics. Scratch the surface, and you might even conclude that his biggest failing is that he isn’t actually very bright.

To him, everything must be seen with excessively partisan political eyes, and that's why he's running around and ascribing motives to an otherwise harmless business deal.

It's all much ado about nothing.