Display options Mobile website

General News of Tuesday, 3 December 2013

Source: The Al-Hajj

Why NPP fears Fortiz take-over of Merchant Bank

There is a Nigerian saying that “When the mouse laughs at the cat there is a hole nearby”. Obviously, this wise saying depicts the motive of the New Patriotic Party (NPP) and some of its propagandist Policy think-tanks in the raging debate on the sale of the distressed Merchant Bank to a wholly-owned Ghanaian firm, Fortiz Equity Fund.

Whereas the NPP and its collaborators have embarked on a never-ending crusade to paint-black handlers of the Fortiz takeover of Merchant Bank deal, particularly the ruling government, as enemies of the state working assiduously to shortchange the country, it has emerged that the NPP has adopted such position to save some of its leading members the burden of having to repay the huge sums they owe Merchant bank.

Not only has the NPP described the sale of the bank as fraudulent and an attempt by government in collaboration with the Bank of Ghana (BoG) and the Social Security and National Insurance Trust (SSNIT) to misappropriate pensioners’ money, they have at the least instance and convenience hounded and blamed the financial difficulties of the bank on Mr. Ibrahim Mahama’s Engineers and Planners indebtedness with Merchant bank which was contracted under the administration of an NPP government in 2007.

It is a matter of public knowledge that the same NPP for political expediency, was to later vary the terms of payment of the loan after they got to know that, Mr. Ibrahim Mahama’s brother, John Mahama, was appointed the late President Mills’ running mate for the 2008 elections.

This, many said was done to frustrate Mr. Ibrahim Mahama’s effort of executing what he sourced the loan for in order to run his company into financial difficulties and not to be able to ‘support’ his brother’s 2008 campaign as vice presidential candidate.

Deliberately sidelining the huge debts owed the failed Merchant Bank by the likes of their founding father and party financier, Mr. Appiah Menka of Apino Soap fame and companies of some of their faithful sympathizers like Myroc, Western Steel, Kinsman Enterprise and Seth Dovlo among others, the NPP has constantly and consistently cited Ibrahim Mahama’s debt as the sole reason why the Bank is being sold.

As if that was not enough, the NPP for obvious reasons took SSNIT and the Bank of Ghana to the cleaners for choosing a wholly-owned Ghanaian firm, Fortiz Equity Fund over a South African company, First Rand Limited in the deal, to the extent that aside the numerous press conferences to paint the deal black, Mr. Andrew Awuni, former presidential spokesperson to ex-President Kufuor is in court not to stop the entire sale, but to ensure that First Rand is given the offer.

What many Ghanaians may not know is that, whereas Fortiz has promised to recover 30 percent of the bank’s bad debt and a willingness to recover 70 percent going forward with 30 percent and above going to SSNIT and SIC Life, First Rand on the other hand said they don’t want to have anything doing with Merchant bank’s debt.

Fortiz intention to go after the Merchant Bank’s debtors of which NPP members and ‘friends’ are the lead defaulters is said to have made the NPP apparatchiks jump to First Rand’s defense in order to save their leading figures and sympathizers the challenge and embarrassment of paying back their loans.

What has even made the case of the NPP debtors to the bank worse is that, President Mahama’s brother, Mr. Ibrahim Mahama, whom the NPP has consistently blamed for the bank’s failure is in the process of paying back all monies he owes the bank by the end of this year, meaning the NPP kingpins must also take steps to do same.

In a related development, and as if God was working against the NPP in their attempt to use crude means to help their members from paying back the loans, the South African firm they are busily fronting for has issued a statement that they are no longer interested in Merchant Bank and that they are working assiduously on establishing their own new banks in Ghana and Nigeria.

The Bank of Ghana has approved the deal for Fortiz to pay 90 million Ghana cedis for a 90 per cent stake in Merchant Bank, but the NPP and its cohorts have criticized the deal, saying the deal is fraudulent because Fortiz does not have the needed capital to turn around the fortunes of the ailing state asset.

Mr. Awuni is in court asking it to place an injunction on the deal for reasons that “the Bank of Ghana is yet to carry out due diligence on the Fortiz Private Equity Fund Limited and also ascertain the appropriateness of Fortiz role in the transaction from another key regulator, the Securities and Exchange Commission”.

Meanwhile, SNNIT and the Bank of Ghana have all come out to deny any wrong or underhand dealing in the transaction.

SSNIT in a statement said the deal was the best among the three bidders, stressing that the purchasing arrangement made by Fortiz was transparent as indicated by the transactional advisors, KPMG.

On the other hand, the Bank of Ghana also has defended the sale of struggling Merchant Bank Ghana, saying it did “due diligence” before giving its approval to the deal.

At a press conference in Accra on November 27, 2013, Governor of the central bank, Dr Kofi Wampah insisted that due diligence was done in approving the deal, adding that the BoG is ready to face anybody in court relating to the MBG sale.

“Am not sure those who say we did not do due diligence know the processes… the Bank of Ghana has no say on who an investor decides to sell its shares to,” Dr Wampah stated.

This article has 62 comments, give your comment