File photo of the Ministry of Finance
Mahama Ayariga’s allegations are baseless, Finance Ministry source
BoG urged to probe alleged sale of state shares at GAT
GAT CEO debunks share trade-off allegations
Government has denied allegations levelled against that it is illegally engaging in a trade-off of state shares of purchased banks to third parties.
This comes after Member of Parliament for Bawku Central, Mahama Ayariga in a petition to the Bank of Ghana called for a probe into the alleged activity on the part of Board Chairman and Chief Executive Officer of GAT, Albert Essien and Eric Otoo respectively.
According to Asaase News, a source at the Finance of Ministry reacting to the claims said government has zero intention to offload state shares of purchased banks to selected private individuals.
“I can tell you for a fact that this is a very big lie and distortion of fact. The truth is that; what we have seen is that the government paid GH¢800 million into GAT, today as we speak the value of that amount has increased to about GH¢900 million,” Asaase News quoted the source.
“What GAT has actually done is to work with these banks to strengthen their corporate governance and to rather become better banks. These are banks that were not being run properly and individuals were getting control over them and not allowing the institutions to run,” the source clarified.
The portal adds that the source at the Finance Ministry pointed that no individual or organisation is seeking to interfere with the operations nor shares of these purchased banks of the state.
“So, it’s rather the reverse and I’m surprised that the MP [Mahama Ayariga] is rather distorting the fact and making it look like somebody is rather twisting things … what I can say with authority is that the banks are rather resisting the change; the change that is necessary to make the local banks stronger and be able to compete more effectively. So, I think it is important to put on record that nobody is interfering in these banks. GAT is not politically…”
The source however told Asaase News that the structure of GAT at the present is raising funds from the public and in return see government grant them sovereign backing.
“Because nobody wanted to give them [the banks] money. So, Parliament approved a sovereign guarantee for GAT to issue preference shares to these institutions,” the source pointed.
“The ongoing transaction that is happening at GAT is happening with the banks. The investment that GAT has done in the banks is still safe and these are governed by shareholder agreements with the banks…under the shareholder agreement, GAT cannot sell those shares unless it gives the first offer of refusal to the existing local shareholders and if they are not able to purchase then GAT will look for secondary means including listing on the exchange”
“So, it cannot be true that you have a situation where the Minister for Finance would be accused of getting individuals to buy and if he [Ayariga] cares to know, the IPO is a public offer. If it’s a private offer, then you can accuse people of hiding something…”
Meanwhile, the source at the Finance Ministry assured that it remains open for investigations into the alleged matter as it also operates an open-door policy.
Mahama Ayariga in the concluding part of his petition has issued the Bank of Ghana with a five-day ultimatum to halt the alleged sale or face legal action and a parliamentary probe.
The Ghana Amalgamated Trust (GAT) was established by an Act of Parliament to help financially resource some local banks to enable them to meet the minimum capital requirement of commercial banks during the onset of the banking sector clean-up.