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Merchant Bank Saga: NDC Caught In A Web   
 
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01-Oct-2012  
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A group of Merchant Bank workers calling themselves the Concerned Workers of Merchant Bank (CWMB), on Friday wrote an open petition to the Commission on Human Rights and Administrative Justice (CHRAJ), urging it to investigate allegations that President John Mahama may have used his influence to ensure that a multi-million cedi debt owed by his brother was scrapped.

Just when the debate was intensifying, the CWMB dropped another bomb, alleging that in 2010, the new directors of Merchant Bank appointed by the ruling National Democratic Congress (NDC), went ahead to guarantee another $5 million loan at the Ghana Commercial Bank for Engineers and Planners (E&P), a company owned by the president’s brother, Ibrahim Mahama, even though the company had failed to pay an earlier loan owed Merchant Bank, a state-owned bank.

This was the latest twist in a complex web which smacked of conflict of interest and abuse of office by the NDC.

In the middle of last week, the opposition New Patriotic Party (NPP) made this scalding accusation in a press conference addressed by a Deputy Communications Director Yaw Buaben Asamoah.

Between 2007 and the end of December 2008, E&P was granted an unsecured loan of about GH¢90 million for its mining and construction operations.

According to the workers, Engineers and Planners was compelled to service the loan by an arrangement that ensured that at least the interest on the loan was paid.

However, since the NDC came to power in 2009 and John Mahama became Vice President, E&P stopped servicing the debt.

The group alleged that the lackluster treatment of the debt servicing was as a result of manipulations from powerful personalities in the NDC government.

E&P DENIALS

E&P issued a statement to refute the accusations that it had stopped settling its debt obligations.

“Arrangements have been made to refinance the loan through a multilateral funding agency. Engineers & Planners is mindful of its confidentiality obligations to third parties regarding the steps that are being taken to re-finance the debt, and therefore is unable to reveal the details of the funding,” stated the Chief Finance Officer of the company, Sulemana Ahmed Amidu.

However, the NPP alleged that with the NDC at the helm of national affairs, the loan, among others, was “ring-fenced” by the bank’s majority shareholder, the country’s manager of the pension fund, the Social Security and National Investment Trust (SSNIT).

The E&P loan was secured during the NPP administration, but the NPP said it was opposed to the deal with no secured collateral, hence the sacking of the bank’s boss then, Blaise Mankwa. The NPP said the subsequent machinations to relieve President Mahama’s brother from paying his debt were conceived during the NDC government.

NPP Assertions

In the NPP’s statement, E&P’s outstanding debt formed part of liabilities categorized as bad debts in Merchant Bank’s books. These liabilities would allegedly be written off as Merchant Bank prepared to be taken over by South African bank, FirstRand.

On Wednesday, August 22, 2012, Reuters reported that FirstRand was negotiating with the Government of Ghana to pay $91m for a 75 percent stake in Merchant Bank Ghana and as part of the negotiation, the Government of Ghana would write off a substantial amount of Merchant Bank’s liabilities including the multi-million cedi loan secured by Engineers and Planners.

The NPP believed that the NDC government had deliberately included President Mahama’s brother’s debt as part of the bad debts that Merchant Bank was expected to declare as “Non-Performing” before being taken over by the South African bank.

“What this deal, struck under President John Dramani Mahama, means is that the suffering workers of Ghana have been forced to swallow the bad debts incurred by some business people so that those business people can go on enjoying their life of luxury, including flying around in their private jets.”

Reminiscence of Hotel Kufour

The allegations being made by the NPP was reminiscent of a similar one in 2004, when ex-President John Kufuor’s son was accused of buying a multi-million dollar hotel (African Regent). The then opposition NDC was dead certain that the transaction was only being fronted for President Kufuor by his son, Chief Kufuor.

The hotel cost $3.5million and it was funded by Prudential Bank, and by the ECOWAS Regional Investment Bank (ERIB) whose board at the time was chaired by J.S. Addo, a representative selected by President Kufuor.

The then opposition NDC claimed that the position of the ERIB chairman was used to arm-twist the sub-regional entity to part with $1million to finance the building of the hotel.

Between 2004 and 2006, there was an intense national furore over allegations and counter-allegations of conflict of interest and abuse of office by the NPP government.

Key proponents of this allegation against the NPP were its arch rivals, the NDC which was in opposition then.

Incidentally, in the current case involving President Mahama’s brother, the NPP was also certain that President Mahama used his influence to ensure that his brother’s liabilities were taken care of by the State.

Kwabena Sarpong, a member of the NPP communication team, drew the link.

According to him, the fact that Blaise Mankwa was currently the financial advisor to President Mahama made allegations of conflict of interest a valid one being made by the NPP.

Blaise Mankwa was the Managing Director of Merchant Bank at the time the contentious loan was secured for Engineers and Planners, in 2007.

Mr. Mankwa was subsequently fired by the Kufuor administration for granting loans without the approval of the bank’s Board of Directors and against Bank of Ghana’s regulations.

The CWMB hinted that Jonas Koranteng Smart, the personnel responsible for recovering the loan from E&P, had recently been sacked by the bank which is controlled by the government.

Government Machinations

Editor-in-Chief of the New Crusading Guide on Joy FM’s current affairs program, News File, on Saturday stated that there were certain degrees of similarities in the 2004 hotel saga and the E&P alleged scandal.

“It is that element of conflict of interest, abuse of office and corruption that makes what is being said about John Mahama today and what was said about Kufour, the same or similar. The elements are different, but the accusations and allegations that were put up out there are similar, if not the same,” he stated.

According to him, the allegations were being orchestrated by some persons in government.

Baako would not mention names but insisted some officials at SSNIT, Merchant Bank as well as some government functionaries were part of the smear campaign against E&P.
“Ibrahim’s company, the E&P, its difficulties began under the Kufuor administration, but the problem worsened under the NDC 2 administration; it is a fact,” Mr. Baako revealed on Newsfile on Joy FM and MultiTV on Saturday.
However, several key officials of the NDC tried to distinguish the E&P saga from the Hotel Kufuor saga, saying that there was no basis for comparison.

“There is a world of difference between the two transactions,” stated James Agyenim Boateng, deputy Minister of Information, when he appeared on News File on Saturday.

“You can tell that this is a deliberate attempt to throw mud at the President. This is a matter that is completely borne out of the imagination of people,” Mr. Agyenim-Boateng stated.

A Challenge to the President

In the midst of the seething public debate on the alleged E&P scandal, the Presidency has not issued any official statement dissociating itself from the allegations, save for snippets of statements from the NDC party and a few government officials. The NPP thus threw a challenge to President Mahama to come clean on the matter.

In a statement issued last Friday and signed by Yaw Buaben Asamoah, the NPP contended: “ Whilst the NPP believes that the intense national debate surrounding the revelations should lead to a change of heart on the part of the Government of Ghana and Merchant Bank, we are very disturbed that in spite of the anxiety that this deal is causing Ghanaian workers and pensioners, the President of the Republic and the Board of the Directors of Merchant Bank have not come out clearly to explain the facts to the public.

“President JD Mahama must show decisiveness on this matter. It is not good enough that not a single illuminating official word has come from the Presidency as to what the position of the government is. Instead, it has been left to a few journalists and social commentators to speculate on Government’s position on this very important national issue,” stated the NPP.

Shifting Goal Posts

There appears to be a dramatic shift in the stance of the NDC since the NPP blew the lid on Ibrahim Mahama’s relationship with the Merchant Bank.

When the hotel scandal broke in 2004, the NDC was a strong opponent of public officers using their office to facilitate the businesses of their relations.

The NDC contended that if ex-President Kufuor’s son could secure such mouth-watering financing for his private enterprise; his father might have used his influence.

Indeed, the NDC was strongly behind an alleged former financial advisor to President Kufuor, Iraqi-born Gizelle Yadzi. Ms. Yadzi claimed she had a tape and video recordings that proved that President Kufuor was deeply involved in the hotel transaction.

Pratt One Shot

She was however unable to implicate Kufour before CHRAJ with her widely touted evidence.

In 2005, the editor of the Insight Newspaper Kwasi Pratt, gained popularity with his “One-shot” crusade when he vowed to brave all odds to take a photograph of the contentious hotel.

Mr. Pratt insisted that public officials should not be allowed to grease their families’ personal fortune with their official influence.

He condemned the transaction involving the son of President Kufuor.

He was certain there was an abuse of office and conflict of interest at play.

Interestingly, Mr. Pratt, who is currently a communications advisor to the NDC government, had stated that there was nothing wrong with the current saga over President Mahama’s brother’s dealing with state entities.

He described the NPP’s allegation as “meaningless and baseless”.

“I think the time has come for us to see business deals as business deals…If Ibrahim takes a loan from Merchant Bank and is not recovered and so on, there are procedures for dealing with this matter rather than this attempt to politicize it,” he was quoted as saying on Metro TV last week.

The NPP, the CWMB and other civil society groups have strongly argued that the matter involving Engineers and Planners and the government entities should be critically investigated and be treated with the same measure of concern akin to those exhibited during the 2004 Hotel Kufuor saga.

“We have noted with concern the attempts by some social commentators and politicians to unduly politicize what should be treated as an economic crime against the people of the Republic of Ghana. We urge you CHRAJ and all concerned Ghanaians to help unravel the mystery surrounding this Merchant Bank sale,” stated the Concerned Workers of Merchant Bank who alleged that there were some official strings being pulled to unduly favour President Mahama’s brother.
 
 
Source: Raphael Adeniran/D-Guide
 
 

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