The Commission on Human Rights and Administrative Justice (CHRAJ) has found that the Finance Minister, Ken Ofori-Atta, breached certain processes in the issuance of the government’s $2.25bn bond earlier this year.
CHRAJ, in its investigation of a conflict of interest allegation leveled against Ken Ofori Atta by a known member of the National Democratic Congress (NDC), Brogya Genfi, said although it found no concrete evidence on conflict of interest against the Minister, he [Ken Ofori-Atta] breached several procedures.
In its 140-page report on the matter, CHRAJ made some suggestions to the Minister of Finance to ensure that due diligence is ensured in subsequent deals.
Among other directives, it said the Minister must as a matter of urgency, pass regulations, rules or guidelines to regulate the format of and criteria for the auctions, and the procedures for participation, bidding, and allocation in auctions in relation to the issuance of securities in the domestic market.
CHRAJ further charged the Minister take measures in preventing Primary Dealers who are also bookrunners/Transaction Advisors from gaining the unfair advantage because of their dual roles.
It had found the Primary Dealers also doubled up as Bookrunners/Transaction advisors, and that dual role gave them an undue advantage.
“Respondent [Ken Ofori-Atta] is either a director, former director or shareholder, or beneficial owner, of several companies whose objects relate to the securities market sector. The companies include Databank and EGL. As such, Respondent’s interests in the growth and wellbeing of those companies, have the potential to conflict with the interests of the state in relation to the securities market such as the issuance of bonds.
It stated that, “The Respondent has business partners and associates related to the securities industry where, according to the Respondent, he has been working for over thirty years. These business partners and associates include partners in Databank, Enterprise Group Limited, Ventures and Acquisitions Limited, as well as Keli Gadzekpo, Trevor Trefgarne and Angela Ofori Atta, also Respondent’s spouse.”
CHRAJ further urged the implementation of section 56 of the Public Financial Management Act, 921 of 2016 in the shortest possible time, due to the imperative of Bonds becoming a feature of the country’s debt payment system and the appetite of investors.
It said section 56 (1) provided that, “The terms and conditions of all government borrowing shall be laid before Parliament and shall not come into operation unless the terms and conditions are approved by a resolution of Parliament in accordance with article 181 of the Constitution”.
“The issuance of bonds is a form of borrowing and therefore operationalising section 56 (2) of the PFM Act with standard terms and conditions for government borrowing through a legislative instrument or through a resolution of Parliament to enable greater transparency in all borrowings is long overdue,” CHRAJ stressed.
CHRAJ clears Ofori-Atta of Conflict of Interest in $2.25bn bond saga
On the substantive matter of conflict of interest however, CHRAJ cleared Mr. Ken Ofori-Atta of any wrongdoing, stating that “On the basis of the evidence available to the Commission, it has come to the conclusion and therefore holds that, the allegations by the complainant that the respondent has contravened Article 284 of the 1992 Constitution by putting himself in a conflict of interest situation in relation to the issuance of the 5-year, 7-year, 10-year and 15-year bonds, have not been substantiated,” it said in its report on the matter.”