Govt suspends Agyapa IPO pending Martin Amidu’s corruption risk assessment

The government of Ghana has frozen the launch of the Initial Public Offering (IPO) by Agyapa Royalties pending the completion of a corruption risk assessment by the Office of the Special Prosecutor.

A letter signed by Deputy Finance Minister, Mr Charles Adu Boahene, and addressed to the OSP, said: “The Ministry does not intend to proceed with the IPO ahead of the results of the corruption risk assessment by your Office.”

The ministry said: “The international investor community has been closely monitoring the outcome of the current state of the transaction, and, it would, therefore, be detrimental to proceed without receiving the necessary approvals and green light from your Office,” it said.

“Additionally, we will be required to fully disclose in the prospectus to the transaction, the outcome of any investigation by your office prior to approval by the respective regulators of stock exchanges in Ghana and the United Kingdom”, the letter to the OSP said.

The letter said the ministry is ever ready to “provide any further information or clarification” to the OSP on the deal.

The Special Prosecutor, Mr Martin Amidu, wrote to the Ministry of Finance a few weeks ago, to hold on with the launch of the IPO until his office had been provided with all the relevant documents and information needed for him to complete his corruption risk assessment of the agreement.

Parliament, a few weeks ago, in line with the Minerals Income Investment Fund (MIIF) Act, 2018 (Act 978), approved agreements to allow the country to derive maximum value from its mineral resources and monetise its mineral income accruing to the country in a sustainable and responsible manner.

The move, gives Agyapa Royalties Limited, the right to secure about $1 billion to enable government finance large infrastructural projects.

Mr Amidu, in a letter to the ministry, said there were some outstanding documents which had not been provided to him by the Finance Ministry concerning the IPO, even though some other documents had been made available to him upon request.

“This Office would have wished to complete its corruption risk assessment on the Agyapa Royalties Transaction soonest but for the non-submission of the information and documents pending to be submitted by your Ministry.

“The information and documents you supplied concerned mainly the processes for and the appointment of the Transaction Advisors which goes to the root of any corruption risk assessment”, parts of the letter said.

It continued: “Information and documents relating to the identification and recommendation by the transaction advisors to your Ministry for appointment a list of other services providers and or underwriters that may be required to complete the transaction as provided in clause 2.2.1 of the mandate agreement amongst others, that are critical to any through corruption risk assessment are also outstanding.

“The legal opinions particularly of the principal legal advisor to the government under the Constitution are relevant to ensure compliance with her recommendations as part of any corruption risk assessment.”

“In the circumstances”, the letter noted, “this Office wishes to urge you to abide by the results of the corruption risk assessment it is undertaking on the transaction before moving to the launching of the IPO transaction.

“This Office makes this suggestion on the grounds of prudence on your part and to also not give the impression that the mandate of this Office on prevention of corruption is of no consequence to the transaction.”

The Parliament of Ghana was billed to provide Mr Amidu with all the documents covering the deal as of Monday, 14 September 2020.

This followed an official request made by Mr Amidu to the legislature in that regard.

The request was pursuant to Sections 2(1) (c), 29 and 73 of the Office of the Special Prosecutor Act, 2017 (Act 959) and Regulation 31 (1) and (2) of the Office of the Special Prosecutor (Operations) Regulations, 2018 (L.I. 2374), which mandate the office to exercise the functions and powers of prevention of corrupt activities.

Parts of the OSP’s official request said: “This office will be concentrating on any potential of the said transaction(s) to promote and facilitate the suspected commission of corruption and corruption-related offences and advise the government accordingly”.

The deal, meant to monetise Ghana’s gold royalties, has attracted a lot of controversy since it was passed by Parliament.

A few weeks ago, the Alliance of CSOs Working on Extractive, Anti-Corruption and Good Governance called for the suspension of the deal pending further dialogue on some critical issues concerning the mineral royalties monetisation agreement.

At a press conference on Tuesday, 8 September 2020, the spokesperson for the coalition, Dr Steve Manteaw, said: “The provision in Section 28(5) of the Mineral Income Investment Fund Act seeks to declassify royalties as taxes and make it a revenue stream for the MIIF and by extension, Agyapa. Exempting Agyapa from taxes, does not exempt government alone, but also the investors.

“This is the more reason the government should not exempt Agyapa from taxes and failure to do so, only benefits the investors.

“In considering Agyapa, what becomes of the government’s manifesto promise to increase royalty share to mining-affected communities”, he pointed out to journalists.

According to him, “in the government’s 2016 manifesto, it stated that: ‘With regard to mineral royalties, the NPP’s policy is to ensure that mining communities receive a higher share of the royalties. Currently, 80 per cent of the royalties go to the government, 10 per cent to the Minerals Commission and 10 per cent to the community. The NPP will reduce government’s share to 70 per cent while doubling community share to 20 per cent. The additional 10 per cent to the community, would be given to the district assembly, to be used specifically for developing infrastructure in the mining community’”.

“How the government is responding to this promise is missing from its effort through the MIIF and the related Agyapa transaction”, Dr Manteaw wondered.

He noted that: “These are important questions that require a national conversation to be addressed”.

“It is not enough for the minister of finance or the government to ask the citizens to trust their sincerity and their expertise.

“It will not be right for them to try and bulldoze through a controversial transaction such as this and about which genuine questions have been raised by experts as well as by ordinary Ghanaians.

“We are, therefore, reiterating our call to the government to suspend the implementation of this transaction pending dialogue on options available to optimise Ghana’s mineral royalties”, he demanded.

Also, the opposition National Democratic Congress, accused the government of mortgaging the country’s mineral resources through the deal.

NDC flagbearer John Mahama, for instance, has said the architects of the Agyapa Royalties deal are cronies of President Nana Akufo-Addo and hinted at cancelling the agreement should he win the 7 December 2020 polls.

“If I become president, I will not accept that deal”, he threatened.

According to him, “the people of Ghana do not accept that deal” since, in his view, “it is against the money laundering rules”.

“If you look at the people who put this together, they are people close to the president and already they have been paid two million dollars”, the flagbearer of the National Democratic Congress claimed.

“This president and his family think they can do anything and get away with it,” Mr Mahama said.

Also, the President of the National House of Chiefs, Togbe Afede XIV, recently said he does not see why the Agyapa Royalties deal should be shrouded in secrecy.

Addressing the Volta Regional House of Chiefs at which meeting he took strong exception to attempts to associate him personally as well as the National House of Chiefs to the controversial minerals monetisation deal, Togbe Afede XIV said: “I, in particular, I’m very much hurt by the attempt to use my name to grant legitimacy to a transaction that has been widely condemned for its secrecy and for the fact that the company involved was incorporated in a tax haven”.

“I do not see why desperation would lead anybody associated with that transaction to want to use the name of the innocent Togbe Afede XIV. I have never commented on this transaction and I have decided not to comment for good reasons,” he stated.