Last weekend’s announcement that LeapFrog Investments, a private investment firm, has bought-into the Finance Minister’s company, Enterprise Group, with $180million, has thrown up an interesting side-s
Sanlam Emerging Markets Proprietary Limited, the company from which Leapfrog bought the 40% minority stake in Enterprise, had to forfeit its share because of a new lease on life that has come with the presidency of Akufo-Addo.
Apparently, the advent of the NPP government in which Ken Ofori-Atta is Finance Minister, brought with it a fertilization of ambition at Enterprise that made Sanlam a lagging liability.
Enterprise suddenly wants to leapfrog its expansion into the West African sub-region, hence the need to cut off Sanlam and bring on LeapFrog, which has more cash to burn.
A statement by Sanlam on the forfeiture of its minority stake in Enterprise explains that its position does not fit it into new ambitions by Enterprise to expand into Africa.
“With SEM as a strategic partner in both the Enterprise Group and Saham Finances, it would have been difficult to meet the regional expansion aspirations of the Enterprise Group. The parties therefore agreed for SEM to exit from the Enterprise Group, but with Sanlam able to continue participating in Ghana.”
SEM, a subsidiary of Sanlam Group, has been paid $130million by Blackstar Holdings Limited, a wholly owned subsidiary of LeapFrog African Strategic Investments, to let go of the entirety of 40% minority stake in Enterprise Group.
The $130 million is part of $150million that LeapFrog is pumping into Enterprise with the company explaining that that investment is its biggest yet in Africa.
$50million of $180million will go to expand the operations of Enterprise, according to a statement on the share acquisition.
How the Finance Minister’s company has suddenly become so ambitious to expand into Africa and is attracting the biggest investment by LeapFrog has left tongues wagging, with many reading that Ken Ofori-Atta is using his position as Finance Minister to good advantage indeed.
Recently, at an International Monetary Fund Forum in Germany, the Finance Minister had used a cameo on the floor of the forum, to do a pitch for Enterprise Group and Data Bank, another company of his, to global investors, even though he had not been called to sell his companies.
Asked by the Forum’s Master of Ceremony to comment on how Ghana’s two year program with the IMF impacts the economy of the country, the Finance Minister had shot into a strange anecdote, declaring himself to have been a bastard for 11 years before mentioning that he is a Yale educated been-to who is part owner of Enterprise and Data Bank.
The Finance Minister did not, for a second, even mention the effect of the IMF’s program on Ghana.
It is only a few months after that IMF pitch in May and already LeapFrog is pumping $180million into the minister’s Enterprise Group. Interestingly, LeapFrog Strategic African Investment was established only a year ago in 2016.
Ken Ofori-Atta’s Enterprise has only recently been entangled in a conflict of interest scandal that the United States Securities and Exchanges Commission is investigating.
The issue has to do with how Ken Ofori-Atta single-handedly sold $2.25billion worth of bonds to Franklin Templeton, a US based juggernaut, even though a business partner of the Finance Minister is a director of Templeton.
Indeed, Mr. Trevor G. Trefgarne, the business partner in question, was concurrently a director of FT and the Chairman of the Board of Directors of Enterprise Group at the time that Ken Ofori-Atta sold the bonds to FT.
It is as both the US SEC and the Commission on Human Rights and Administrative Justice (CHRAJ) are investigating this scandal that LeapFrog has bought 40% minority shares in the same Enterprise Group at a cost of $180million.
According to Sanlam, the company which gave up the 40% stake, the reason it had to sell off its shares in Enterprise to LeapFrog is that an ambitious expansion plan of Enterprise into Africa puts it into a difficult position as minority shareholder.
Enterprise’ sudden lease on life which has made it jilt one shareholder for another is coming just six months into the Akufo-Addo government’s days in power. The investment into Enterprise by LeapFrog also follows fairly close on the heels of the Franklin Templeton scandal.