…As SEC Tightens Noose Around His Neck Over $2.25Bn Kenbond Scandal
The United States Securities and Exchange Commission (SEC) is tightening the noose around the neck of Mr. Ken Ofori-Atta, Minister of Finance, as it has launched an in-depth investigation into the business practices of Franklin Templeton Investment Limited over the US$2.25 billion bond deal with Ghana.
The investigation, led by Jennifin Carr as the case manager, is still in the preliminary stage, but signals picked up indicated that the giant US financial investment company, FranklinTempleton, may not escape charges of unethical investment practices as the investigation has pointed to.
One of the unethical investment practices under the Securities Laws and Regulations is insider-trading, an illegal practice of the purchase or sale of securities for personal gain in light of their personal insight or information regarding a given security.
Reliable information intercepted by The Republic has revealed that, the Minority members in parliament, who filed the complaint before the SEC, have been contacted severally to assist with further and better particulars.
The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, Western Europe, where the Minority has additionally filed a whistle-blower complaint, has also begun investigations.
A research conducted, the Minority claimed, revealed Franklin Templeton used a subsidiary company registered in Luxemburg to purchase 95% of the $2.25 billion scandalous bond.
The CSSF is responsible for the supervision of credit institutions, investment companies, pension funds, regulated securities markets and their operators, multilateral trading facilities and payment institutions in Luxembourg.
According to sources, the concurrent investigations by the two commissions opened three months ago, after backdoor talks between the SEC and the Ghanaian authorities for the matter to be swept under the carpet had broken down.
Similar concurrent investigations are also underway in Ghana by the Commission on Human Rights and Administrative Justice (CHRAJ) over possible conflict of interest and secrecy in the deal.
The smelly $2.25billion bond deal was allegedly struck in secret between Mr. Ofori-Atta and Mr. Trevor G. Trefgarne, Director of Franklin Templeton.
Trevor Trefgarne, Director of Franklin Templeton and Board Chairman of Enterprise Group, will be investigated on his investment deals with Ghana, as well as business relations with Mr. Ofori Atta.
The US’s financial regulatory body, per sources of information, is credibly convinced to investigate the $2.25 billion scandal after preliminary finding pointed to a suspected deal in the bond.
Deep-throat sources add that the SEC may also issue subpoenas to well-known institutions and individuals who it deems might have had information to help in its investigation, especially the participating investors claimed by the Ghana’s Finance Ministry.
Hon. Samuel Okudzeto Ablakwa, the Minority lead complainant, and spokesperson on foreign affairs in parliament, told The Republic exclusively that the SEC is in talks with them (Minority) and that the case is not dead as Ghanaians may mistaken its absence in the media.
“In fact, investigation is ongoing, we have constantly been briefed of their investigations so far, and we are all hoping they (SEC) will do a good job for Ghanaians. One thing is that we have confidence in each other. We trust that this investigation will lead to good result, which is the truth,” the North Tongu MP told this paper over the weekend.
The shocking $2.25 billion bond scandal has rocked the investment industry and raised serious questions about the issuance of the bond in less than 24hrs to a foreign entity without parliamentary approval.
The bond was also alleged to have been issued in secrecy, which the Minority described as insider-dealing, as many local financial investors were reportedly unaware of it in the market.
The ongoing investigation is likely to give ammunition to the minority lawmakers who have been pushing for exposure on the secret and insider deal, which is going to cost the country huge sum of financial debt.
Mr. Ablakwa added that, “We are confident the Securities Exchange Commission’s strong policies, procedures and controls are functioning well, and will deal with this issue to ensure that Ghanaians are not short-changed.”
The case of the Minority is that Article 181 of the Public Financial Management Act, which enjoins the Finance Minister to bring the deal of such nature before the august House for approval, has not been respected.
In the considered opinion of the Minority, Mr. Ofori-Atta’s confession that the bond was issued to switch short-term domestic instruments, which is 91 and 182 days treasury bills, trading at 16.35 per cent and 16.70 with a long-term debt of 19.75, was misplaced and puts a heavy financial burden on the nation, specifically the future leaders of the country.
Per the Minority’s calculation, the Government of Ghana will in the future have to cough up an interest of about $440million annually and $6.9billion interest to the Franklin Templeton within the 15-year bond.
“What surprises us is for the Finance Minister to go for a long term debt of 19.75 per cent to switch off a debt of 16.35 per cent. In fact, his action is wilfully causing financial loss to the state,” the Minority argued.
The Minority had earlier summoned the Finance Minister through a motion on the floor of parliament to provide detailed information, including the full complement of documentation related to issuance, participation, utilisation of the proceeds and currency in which it was issued.
They alleged that, the Finance Minister issued the bond secretly in favour of his business partner, Trevor Trefgarne, to possibly scoop dividend at the expense of the Ghanaian taxpayer in 15 years’ time.
In the considered opinion of the Minority, the investigations will lead to exposure of how the bond issuance in which Franklin Templeton purchased 95 percent of 15-year and 7-year bonds was done within three hours instead of a week.
Following the Minority’s petition, the SEC has appointed a respected case manager, Jennifin Carr, to spearhead investigation and expected to dig into the financial dealings between Trevor Trefgarne of Franklin Templeton Investment and Ghana’s Finance Minister.
Source: therepublicnewsonline.com/ Felix Engsalige Nyaaba