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Togbe Afede XIV, the resigned Board Chairman of the troubled National Investment Bank (NIB) has exposed serious raw deals the Finance Minister’s proposed Ghana Amalgamated Trust (GAT) was planning to give the majority state-owned Bank.
The GAT deal which has been described as a scam by financial analysts includes attempts to sell off NIB’s assets ‘for peanuts’; paying GAT a whopping about GHC 70milion or 5% of the deal as transaction fees even though GAT is the investor in the deal; forcing an unnecessary banking consultant on NIB despite an existing banking consultant from the Bank of Ghana, among other.
Whatsup News has intercepted a direct letter written by Togbe Afede XIV to finance Minister Ken Ofori-Atta, saying NIB does not find the transaction fair.
In the letter dated February 11, 2019, Togbe Afede told the Finance Minister that NIB does not need GAT to give it the proposed GHC 1.4 billion to recapitalise because NIB can recapitalise itself without external help, particularly if government extends the same preferential treatment of granting it 100% Sovereign Guarantee like it is giving GAT.
“…we reiterate NIB’s ability to raise the required capital without GAT, and particularly if the Government provides NIB with the 100% sovereign guarantee that it has made available to GAT,” Togbe Afede stated unequivocally.
According to the intercepted letter, the NIB board proposed to sell off some of its assets in Nestle Ghana to secure about GHC 450million (enough to meet the bank’s minimum capital requirement) but the Akufo Addo administration refused to grant the NIB board the necessary approval to raise these funds, “…the Board had proposed the sale of its 24% stake in Nestle for between GHS400-450 million to bring in additional capital and liquidity but could not get the Government’s approval,” Togbe said.
Also, in the GAT proposal, NIB’s assets would be valued without any factoring the estimated future value of those assets at 1 x NAV (unit of Net Asset Value). The board chairman who was clearly suspicious of the whole GAT deal warned the Finance Minister that it was an unfair valuation of NIB assets, “We do not think the 1xNAV valuation of NIB is fair to existing shareholders. It is also important to note that a lot of NIB’s equity holdings and non-financial assets are in the book at historical values. The Board thinks that it would be prudent to mark these assets to market, and apply a modified NAV, that is, adjusted NAV, to the agreed multiple in pricing NIB’s shares,” he said.
In the deal, renowned lawyer linked to the ruling New Patriotic Party, Ace Annan Ankomah and his law firm Bentsi-Enchill Letsa & Ankomah (BELA) would cream off a hefty GHC 1.7 million as transaction legal representatives. Other advisors who would enjoy a hefty cut from transaction fees include: Algebra Securities Limited, Stanbic Securities Ghana Limited (SBG), PriceWaterHouseCoopers and KPMG.
Finance Minister Ken Ofori-Atta in January announced plans by the government to use some GHC 2 billion of private pension funds of workers through the GAT to support some five struggling banks to meet the new minimum capital requirement of 400 million cedis. The banks are Prudential Bank, Universal Merchant Bank (UMB), Sahel/Omni Bank and NIB.
NIB appear to be the main target as it would be allocated a lion’s share of the capital (GHC 1.4 billion) as speculations explode about the GAT being a clever set up to use state resources to strengthen state banks like NIB and ADB for takeover by private investors linked to the New Patriotic Party (NPP) Administration.
Already, insiders at the Finance Ministry have told Whatsup News that big players in Wall Street-United States, have lined up to take over particularly NIB and ADB.
Meanwhile, the transaction between GAT and NIB has not yet received a formal, duly documented approval of the Bank of Ghana (BOG).
Apparently, the NIB board had met on a number of occasions with Finance Minister Ofori-Atta to discuss their contentions with the deal. The last of such meetings was held on Sunday February 10, 2019 at the minister’s office.
The Board chairman Togbe Afede XIV resigned shortly afterwards. Insiders say he resigned following his conviction that the finance minister was adamant on pushing the GAT deal through, despite serious issues raised about the transaction.
Source: Whatsup News