Investment firm Databank opted out of the controversial Agyapa Royalties deal because of the “noise” that surrounded it, Finance Minister-designate Ken Ofori-Atta has told the Appointments Committee.

Answering a question about the brokerage firm’s withdrawal from the deal, Mr Ofori-Atta, who is a shareholder and co-founder of Databank, told the committee on the second day of his vetting on Friday, 26 March 2021, that: “Yes, I did see a letter and actually, I was quite quizzical but you know, with corporates, after a point, these noises do not help”.

“And I believe that they thought if their presence was going to be inimical to the realisation of this vision, which they believe in, then it’s better to step out to avoid that noise”, he explained.

A day earlier, Mr Ofori-Atta, who served as Finance Minister in President Nana Akufo-Addo’s first term, also told the committee that there was no conflict of interest, as far as the initial involvement of Databank in the deal was concerned.

Announcing its withdrawal as transactional advisors, Databank statement in a statement that its Board of Directors “has observed with deep concern, persistent attempts by some political actors, during the political season leading up to the general elections of December 2020, to tarnish our hard-won reputation painstakingly built over the last 30 years, by unfairly exploiting our participation and involvement in the transaction as one of the transaction advisors”.

It added: “We believe this is principally due to the Minister of Finance’s association with Databank as its co-founder.”

The statement, signed by Mr Kojo Addae-Mensah, Group CEO of Databank, explained: “The Board of Databank, while being convinced about the immeasurable benefits to be reaped by the Republic of Ghana from the transaction, is of the view that the tumult generated by the involvement of Databank in the transaction, coupled with insinuations and aspersions cast on the reputation of the company in the lead up to the election, not only grossly compromises the ability to execute such a market-sensitive and novel transaction, but also has a real tendency to severely damage the invaluable business reputation of Databank”.

“It is this deep market knowledge and extensive experience that makes us understand that the potential damage from the fall out of all the negative press regarding Databank’s involvement in the Agyapa transaction, especially the proposed IPO, despite our sterling track record over the years, is incalculable both in the domestic and international financial markets”, Databank noted

“The reasons expressed above have compelled us to take the hard-decision to formally withdraw our services as your partner and co-transaction advisor on this mandate”, the firm said.

Defending Databank’s involvement in the deal, which he said was clean and without any influence of his, Mr Ofori-Atta told the committee on Thursday, 25 March 2021 that: “In my situation, I truly do not engage in these procurements and transactions, as we think broadly on the economic freedom space for people, our international relationship to make sure that we get the best people. So, I can give you my commitment. Certainly, I’ve not been on the boards of Databank since 2014, 2012, I’ve retired from that. I think we built two great companies”.

In his view, the attractiveness of Databank is what has earned it places in government’s financial transactions for the past 14 years.

“I know that in my capacity as a public service official, who has been a director but co-owner of that company, I was not part of any decision-making with regard to that”.

“But I think we should be having, truly, a broader discussion about Ghanaian enterprise and, therefore, how independent and experienced entrepreneurs can join government at any point in time”, he proposed.

Demonstrating how meriting Databank was to have been landing such roles, he said: “So, here is a company that is 30 years old, that started by borrowing $25,000, that started – I guess Kantamanto is a place you’ll not think an investment bank can start – but this the resource the Ghanaian entrepreneur had to start that”.

“After 30 years, with 500,000 accounts of Ghanaians, a billion cedis under management, offices around the country, having participated in every Eurobond transaction since we started in 2007, are we truly saying that in the event of anybody becoming an Attorney General, you can’t use your other offices, in the event of being a Finance Minister, I think these are fundamental questions and, therefore, if the rules are clear on what you’re talking about, I don’t think we should encourage such cynicism because it just goes to poison the environment and then we lose”, he noted.

“I don’t think there was any conflict of interest; straight away, because I was not part of the decision. I think the first-class nature of that institution speaks for itself and the Ghanaian entrepreneurial ingenuity that has brought it this far, must be praised and we should be encouraging our companies to grow so that we can begin to do the Eurobonds ourselves”, Mr Ofori-Atta told the committee.

He also expressed qualms with former Special Prosecutor Martin Amidu for publishing a demining corruption and anti-corruption risk assessment of the Agyapa deal without adding his input.

“The fundamental flaw in the approach that the OSP took with regard to whether he gave us a chance to respond or not and I think that should be of keen interest to this house as just a rule of law. And, so, to then go on to accept, acknowledge a document in which your citizens were not able to give their views on, I think it’s something that we should not encourage”, he complained.

Mr Ofori-Atta said the ministry did nothing wrong with regard to the deal.

“I do not feel that we broke any rule. I think the AG will be able to give you a firm assessment of that”, insisting: “I think such conjectures are inimical to growth and it does not help the kind of freedom, policy orientation and innovation that we require for this country to grow”.

He said attempts to find outside-the-box ways of leveraging Ghana’s natural resources must not be impugned the way the Agyapa deal was.

“If you consider that Ghana is the largest exporter of gold in Africa and still this is the nature of our industry, I think it stands to pause that something different must be done within the remits of our Constitution and that is why we are resubmitting to find out the [kinks] but I think the philosophy of trying to get more equity, trying to leverage our resources, is something that we should all consider and know that it’s important for us to transform and I do not believe that we broke any rules by the way in which the procurement was done”, he argued.

He also noted that he is a protector of the public purse rather than a destroyer.

“I think what I would like to establish is that in the mandate given me as Minister of Finance, I had no interest in breaching the Constitution and, therefore, in the same vein in which we did a transaction in February 2017 with regard to the $2.25 billion (cedi equivalent) in which a whole brouhaha was raised and we went to CHRAJ for us to be proven to be innocent, I think it is with that mindset when I sit at the ministry and that I think of protecting the public purse and ensuring that this country moves forward.

“And, so, I would really encourage some forbearance on that because I think it sometimes poisons the public to think in a certain way, which then blunts innovation and creativity for the future and I think we are lost for that”, he added.

He believes being innovative can get Ghana to squeeze out more revenue from her natural resources.

“If you look at cocoa, for example, in which we have been stuck in working within the GHS3 billion bracket of seed money while the industry is 140 billion and there has been no sit-down, really, by us in this august house and politicians to relook at how we can gain more from that, it’s problematic but I think once these sort of accusations are brought, it is tiring and it leaves one just doing the mundane.

“So, let’s as a people get into a narrative of questioning whether the current use of our resources are the best ways to use it and find a way to get more equity into our system but ensure that we follow the rules”.

Background

The Akufo-Addo government, during the first term, set up Agyapa Royalties Limited through the Minerals Income Investment Fund (MIIF), to securitise Ghana’s gold resources.

The government did that after Parliament, on August 14, approved the Agyapa Mineral Royalty Limited agreement with the government of Ghana despite the walkout by the Minority.

In exchange, the company planned to raise between $500 million and $750 million for the government on the Ghana and London Stock Exchanges to invest in development projects.

The government suspended the deal after a damning report on it by Special Prosecutor Martin Amidu at the time.