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We Have Done Nothing Illegal — PDS   
 
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07-Aug-2019  
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The Power Distribution Services (PDS) Ghana Limited says it has done nothing illegal in its transactions, and is thus ready to fully cooperate with the Government of Ghana (GoG) in its investigations to help find an early resolution of the dispute that has led to the suspension of the power distribution concession agreement in the interest of the country.

PDS insisted it had acted in good faith and had not engaged in any ‘fraudulent’ deal as Ghanaians had been made to believe, and was thus ready to clear its name.

Reacting to the issues for the first time since the controversy came up following a terse statement that was issued  last week, the Chairman of PDS, Mr Philip Ayesu, welcomed the government’s proposed 30-day investigation into the issues, saying it would help the company clear its name of any wrongdoing.

As part of its commitment to resolve the impasse, PDS has also given an assurance that it will cooperate with all stakeholders in ensuring that power supply is not interrupted, pending the determination of the issues relating to the insurance company, AlKoot’s fraud claim made  to the Electricity Company of Ghana (ECG), the Energy Commission’s alleged “unlawful acts” and restoration of normalcy as provided by the three Concession Agreements relating to the PDS Concession.

“PDS has not done anything illegal and the investigations will help us clear our name,” Mr Ayesu stressed in an interview with the Daily Graphic.

He said he was optimistic that the commitment being showed by the PDS would assist the government in the early resolution of the dispute.

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The PDS Board chairman further indicated that the board had held an emergency meeting to discuss its plan and what it could do to ensure that there was quick resolution of the issue.

Misleading

Mr Ayesu expressed the opinion that someone from the ECG had been trying to use AlKoot to mislead the government and was, therefore, of the belief that the truth and the facts would all be known when the investigations were completed.

“Whoever gave the government that hint or information schemed to procure a 16th July, 2019 letter from AlKoot, alleging that it had no relationship with PDS and that the Demand Guarantees presented by PDS were fake; did not exist as they were obtained by fraud, and was not signed by an authorised person,” he said.


Per Mr Ayesu’s explanation, it was strange that the said letter was not copied to PDS or the brokers of AlKoot, the reinsurance broker, Jo Australia, and Donewell Insurance.

“By an email from AlKoot dated the 30th of July 2019, AlKoot stated that it had not received premium for the Demand Guarantees so it declared its intention to cancel both Demand Guarantees,” he said.

On July 31, 2019, Mr Ayesu said, AlKoot sent its formal notice of cancellation of the demand guarantees to its broker, Jo Australia, which was not copied in the July 16, 2019 letter from AlKoot to ECG which had alleged fraud and raised forgery.

According to the PDS boss, the reason stated for the cancellation of the demand guarantees was not fraud or forgery, and stressed that until July 31, both demand guarantees were in place and were only cancelled on July 31, for “non-receipt of premium.”

“Meanwhile, PDS had paid the brokers of AlKoot (Donewell Insurance and Jo Australia) through CAL Bank for the payment of premium.

 “PDS was presented with the July 16 letter of AlKoot for the first time on July 29, 2019 at the office of the Minister of Energy,” Mr Ayesu said.

He further maintained that since PDS had not procured the Demand Guarantees directly but through CAL Bank and Donewell Insurance, the company requested that representatives of the two organisations join in the meeting of July 29, 2019.

“A decision was taken at the meeting of July 29, this year that a team comprising all interested parties, ECG, CAL Bank, Donewell, PDS, Ministry for Energy, Ministry of Finance and the Millennium Development Authority (MiDA) should be despatched to Qatar on July 31, 2019 to verify the status of the Demand Guarantees from AlKoot.

“Awaiting the implementation of the plan as stated above, PDS received a letter from ECG on July 30, 2019, stating that since the Demand Guarantees were fraudulent, ECG had suspended the rights and obligations of itself and PDS under the concession,” Mr Ayesu explained.

ECG's role

ECG as part of the due diligence is said to have received the letter from AlKoot, which alleged the fraud.

The PDS Chairman reacting said PDS was not copied on the said letter which alleged the fraud.

According to some sources, ECG claims it wrote to PDS for a clarification on their said discovery but PDS did not respond.

Background

The government suspended the concession agreement with PDS on Tuesday, July 30, 2019, for what it described as “fundamental and material breaches of PDS,” obligation in the provision of Payment Securities for the transaction,” which had been discovered upon further due diligence.

A statement from the government said a full-scale enquiry into the power concession agreement with PDS Ghana Limited had begun and was expected to last for 30 days.

The statement also said the government had taken steps to ensure that distribution, billing and payment services were not interrupted and assured the public that the development would in no way interfere with the distribution of electricity services to customers.

In its response, PDS said it acted in good faith in its dealings with the government of Ghana.

Names behind PDS

The Ghanaian local consortium holding the 51 per cent of the shares in PDS are TG Energy Solutions Limited (TG), a lead local consortium sponsor with 18 per cent; Santa Baron Ventures Limited (Santa), a local technical lead with 13 per cent; GTS Engineering Services Limited (GTS), a local financial lead with 10 per cent, and TBK Ghana Limited (TBK), a local financial sponsor also with 10 per cent.

The remaining 49 per cent shares are for two foreign companies, Manila Electric Company Limited (Meralco), a Filipino company which has 30 per cent shares, and Aenergia, an Angolan company with 19 per cent shares.

The two foreign companies are the technical leads for the consortium and by extension PDS.

Unified Ghanaian ownership

Meanwhile, in a letter dated March 27, 2019, signed by the Minister of Finance, Mr Ken Ofori-Atta and addressed to Mr Akoto Ampaw, a lawyer and Chairman of the Negotiation Committee for the Electricity Company of Ghana (ECG) and Private Sector Participation (PSP), the minister indicated that TG Energy Solutions' shares had increased to 28 per cent as part of efforts to secure and safeguard Ghanaian ownership of PDS.

The Finance Minister's letter explained that the move was aimed at ensuring and safeguarding Ghanaian ownership of PDS and to ensure that control of PDS was secured with Ghanaians in a "unified manner."

The letter said the Ministry of Finance required that the Ghanaian shareholding was consolidated and held by a single, newly incorporated Ghanaian entity (the SPV - special purpose vehicle) in which the initial Ghanaian shareholders (and or any other Ghanaian investors from time to time) would hold shares.

Therefore, the initial Ghanaian shareholders were to transfer their respective shareholdings in PDS to the SPV, a structure which was to preserve the Ghanaian control of PDS in the SPV (as opposed to three separate entities as was currently the case) and ensure that 51 per cent shares in PDS were always held by a Ghanaian entity.

US on forensic audit

Meanwhile the Embassy of the United States of America (USA) in Ghana has urged the government to conduct a thorough forensic audit into claims of fraud regarding its contract with PDS.

The move, the US believes, will help establish the full facts surrounding the contract.           

The call was contained in an email from the Press Attache of the US Embassy in Accra, Ms Naomi Mattos, in response to enquiries the Daily Graphic made regarding the suspension of the PDS contract by the government and its impact on the Compact II. 

“The U.S. Government strongly encourages the Government of Ghana to conduct a thorough forensic audit into claims of fraud in order to fully establish the facts of the matter.

“Only then can all relevant parties make a transparent and evidence-based decision in the best interests of the citizens of Ghana,” she said.
 
 
Source: Daily Graphic
 
 

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