The Medusa Principle

I wonder what former president; Flt. Lt. Jerry Rawlings, makes of the current state of affairs in the country.

It is rather sad that after all the bloodshed, pain and suffering, which was geared towards bringing the nation and its people into an era which will mean a fair distribution of wealth, accountable governance and progress, the spectre of activities which gave rise to the revolution is now seen to have regenerated into a monster; a behemoth of corruption which feeds itself and leaves nothing but pittance for the suffering masses.


Recent in the news was the challenge by Mr Awuni, the head of a think tank against the attempt to off-load a bank belonging the Social Security and National Insurance Trust [SSNIT]. The issue which involves money which belongs to the people, is shrouded in secrecy, with details of the conduct of the government and parties involved causing a great deal of angst and frustration.


The failure by the government to explain the situation, which has now turned into a scandal and the dismissal by the High Court of Mr Awuni’s claim on the grounds that he lacks the capacity to mount such a challenge, has heightened the concerns of the people.


Mr Awuni may have filed his claim incorrectly, but any citizen would have the grounds to mount a challenge, on the basis that any such sale involves money contributed by the people and meant as a support for their welfare after a lifetime of work. In a country with few guaranteed social security safeguards, it is of great importance to the people that their principal social security structures are protected. The government has a duty of care to ensure that it is so.


If the government and the Trust [SSNIT] which manages pensions are negligent in this steward i.e. allowing pension funds to be passed on, at a cheap rate to a rustled-up organisation with a sole aim of profiting or similar benefit, a claim of negligence can be advanced for breach or dereliction of duty. Such a claim may be made against the Trust [SSNIT] and or the government.


There are many appendages to this particular sale, which will lead a reasonable person to assume, that this transaction is probably not in the interest of the savers. It is an entrenched speculation, that the sale is meant to give undue relief from payment, a loan made to an engineering firm, of which the president is linked. Coupled with that, we have a tripartite situation of the President receiving legal advice on best value for the nation, from an advocate who is also the advisor for the engineering firm, which has thus far failed to hand back monies borrowed under the terms of an agreement.

It is the same advocate [for a third instance in a single divergent scenario ] giving advice to a private equity firm which has popped up, trying to seize control of the Merchant Bank.


A single firm or individual simultaneously advising three parties within a conflict, each of whom should receive sound independent legal advice, is highly unethical. Such an arrangement is highly inappropriate and unless there is a very obscure reason [ that nobody seems to find ] such an action amounts to a malpractice.


The clue to a solution for Mr Awuni’s challenge is in the determination given at the High Court. The lack of capacity as given by Mrs Justice Sophia Rosetta Benasko Essah in dismissing the case, outlines the latent fact that, there are too elements in the case for one individual to handle. The right adversarial balance cannot be achieved for Mr Awuni by himself or the courts if he acts to challenge the sale by parties who are all acting in concert. It will be a waste of the public’s money for an objective which can be achieved simply in another way.


A manner of dealing with such a hydra headed situation, is to resort to a simultaneous modular challenge; separate the liability and apportion a specific and unrelated blame to each party, for their part in the chain of negligence leading to the sale. The trust SNNIT can be challenged for breach or dereliction of its duty to the people whose pensions it manages [e.g by the refusal of an obvious better offer from the South African Bank]. And to prevent any assistance, a separate challenge can be made against the Minister in charge pensions in the government, for failing to properly oversee the Trust [SNNIT].


There is a strong suspicion that investors of the private equity firm, might come as a surprise to many. It will be a better idea if Mr Awuni had the support of his MP and had the matter raised in parliament.


Lets look at the Merchant Bank sale.

The Merchant bank was owned by SSNIT, the national Trust set up by the government to manage social funds, pensions and national insurance. As a way of managing the funds to get a good return, the Merchant bank was set up, to enable the Trust to lend some money to businesses.


Enter Engineers and Planners, a multi facet, multinational corporation. In other words a large business group with various enterprises or operations in more than one country. Partly owned and or managed by a Ghanaian business mogul reported as related to the president, Engineers and Planners took out a loan from the Merchant Bank, under an agreement which outlined the terms of repayment.


At some point for a reason which is disputed, Engineers and Planners decided against paying back the money it had borrowed from the Merchant Bank. Placed under pressure to repay using banking laws, Engineers and Planners faced a real threat of possible bankruptcy or being forced into administration.


Engineers and Planners quickly scrambled a petition to the influential sibling of its CEO at the presidency, to ask for an intervention, giving reasons on why they should be allowed to keep and still use money which belongs to the hard working citizens of the nation. Their argument; the government should support local businesses which work to support the economy and create jobs [ even if it means using money that it is being withheld unlawfully and kept from its rightful owners ].


The most apt individual for the job as reported, was the legal counsel for Engineers and Planners, who also doubles as the legal counsel for the president and was supposed to advise against companies who unlawfully take other peoples money and do not want to give it back.


An answer had to be found, to stop The Merchant Bank forcing Engineers and Planners possibly into bankruptcy [or administration] and seizing its assets to recover the cost. The solution was to take away the banks capability to apply pressure on Engineers and Planners, allowing the company to keep and still use the pension money it had borrowed and which it was obliged by law to repay.

A consortium of sorts, was formed by unknown parties, in the guise of a private equity firm [ a business which manages private investments for its clients ]. Again, Counsel for the firm was the same as for the President.


SNNIT which had the majority shareholding in the Merchant Bank and was not in any distress, somehow off loads its majority stake holding, totalling in excess of 70% to an inferior bid; the newly formed private equity firm of unknown parties.


The shift in fulcrum means that, the Private Equity Firm will be in a position to determine if Engineers and Planners should pay back the money that it is withholding unlawfully. If they consider it a bad loan. The pensions that people have worked for, probably all their lives, will be kept by Engineers and Planners and the unknown parties forming the Private Equity firm. And the most searing aspect is that, there is virtually little that can be done about it. It is extremely difficult to revert a transaction made to a private equity firm.


In cases such as this, it takes the collective action from groups such unions to exert the clout, necessary to thwart such obscure or questionable dealings. However with the head of the Trade Unions having had a turn of heart after being called to the side of the picket, any influence from the union is now obviously compromised.


My opinion of the head of the workers union, who is reported as saying; he needs time to gather the information to explain why he now backs the sale is: “If a person is telling the truth, he does not need time to think about it“. If he was my representative, I would not believe a word that comes out of his mouth.


It should not take Mr Awuni, to raise concerns and challenge the questionable sale of the Merchant Bank. It is very surprising that no one in parliament including Mr Awuni’s MP, acted to represent the people and ask questions on their behalf on what is seen as a questionable manner in which people’s pensions is reported as being handled.

Given that there was a much higher bid for The Merchant Bank from an established South African bank, which was bent on still pursuing Engineers and Planners and other debtors to retrieve that which was owed, it begs the question; [ Unless there is a better rationale…]What kind of people, make it a life mission, to plan and take money from poor hardworking citizens, just so a few people can add to the wealth that they have?


Jedd Rii