The Herald continues investigations into the takeover of the Electricity Company of Ghana (ECG) by a consortium known as Power Distribution Services (PDS) and suspension of same, over what the government says is fraud related in the payment of guarantees submitted by the PDS, has established a rather murky situation, including family feud.
This paper is leaning about a deep-seated acrimony in the Akufo-Addo family with various individuals align to the different personalities in the family.
Interestingly, greed appears to have taken a center stage with accusations that those collecting and sharing electricity bills from consumers as part of revenue accruing to PDS, are not sharing the booty well.
Two issues have emerged as to what eventually led to the suspension and government’s promised 30-day inquiry into the transaction and the detected fraud, forging of signatures among others. But what is unclear is, where the Minister of Justice and Attorney General, Gloria Akuffo, stands in the back and forth over the PDS.
So fierce is the confusion over who controls PDS that, there were attempts to redefine the shareholding structure and composition of the consortium with the introduction of companies such as; TBK World Plus Limited to be entitled to 15percent; Anthony Oteng-Gyasi to be entitled to 15percent and the state-owned Ghana Infrastructure Investment Fund to be entitled to 10percent.
The new structure changing local content and participation in the ECG-PSP Transaction was different from what Parliament had on Tuesday, July 24, 2018 approved.
Insiders told The Herald that Finance Minister, Ken Ofori-Atta, is reportedly leading a section with his lifelong friend and ECG Board chairman, Keli Gadzekpo, and they succeeded in torpedoing the deal with suspension on the account of fraud, to spite other members of the Akufo-Addo family aligned to Gabby Asare-Otchere-Darko’s Danquah Institute.
The Danquah Institute (DI) group, includes Lawyer Sophia Kokor of DI and Philip Ayesu of X-men barbershop, David Ofore-Asare of Zoomlion Waste Management Company, the NPP Member of Parliament (MP) for Sekondi; Andrew Agyarpa Mercer and one Joseph Adjei-Banin. Philip Ayesu is the Chairman of PDS.
Those citing the family fracas and the control of PDS money, argued that Keli Gadzekpo, being the Chairman of ECG board, would be in the know and sanctioned the due diligence on Al Koot Insurance & Reinsurance Company of Qatar, by the management of ECG, leading to the establishment of fraud.
The Millennium Development Authority (MIDA) led by Martin Eson–Benjamin, had failed to carry out the due diligence on the payments plan submitted by the PSD to the government of Ghana as security guarantee in the management of the ECG’s assets pegged at over GHC22 billion.
But others, have also said that the American government through the Millennium Challenge Corporation (MCC) account, sparked the investigation leaving the Akufo-Addo government with no choice than to kowtow.
The Herald is informed that, the Americans have since decided to withhold some US$100 million, which is part of the US$580 million the government of Ghana was to fully access from the American government to turn things around for the power sector.
The arrangement between Ghana and the Americans, has been to enable private sector participation in key policy and institutional reforms to provide more reliable and affordable power to Ghana’s businesses and households leading in the fight against global poverty.
However, documents trickling from multiple sources on the transaction reveal that all has not been well with the PDS deal since it took charge of the state asset in March this year.
A letter authored by Ken Ofori-Atta and cited by The Herald, revealed the Minister of Finance at one point appointed prominent New Patriotic Party (NPP) member, Lawyer Akoto Ampaw as “Chairman of Negotiation Committee of ECG-PSP to repackage the arrangement with respect to “Ghanaian ownership of power distribution service Ghana Limited”.
The letter dated March 27, 2019 said “I refer to the recent transaction pursuant to which Power Distribution Services Ghana Limited (PDS) took over the operation and management of the electricity distribution business of the Electricity Company of Ghana Limited”.
It letter said “Currently, 51% of the shares in PDS (the Ghanaian Shareholding) are held individually by the following Ghanaian shareholders: GTS Power Limited – 10%, ii. Santa Power Limited – 13%: and iii. TG Energy Solutions Limited – 28% (together, the Initial Ghanaian Shareholders)”.
“Following the conclusion of ECG’s transfer of its power distribution business to PDS, it is paramount importance to ensure the security of the PDS business and its ownership by Ghanaian shareholders. In order to safeguard Ghanaian ownership of PDS and to ensure that control of PDS is secured with Ghanaians in a unified manner, the Ministry requires that the Ghanaian shareholding is consolidated and held by a single, newly incorporated Ghanaian entity (SPV) in which the Initial Ghanaian shareholders would be required to transfer their respective shareholdings in PSD to the SPV. This structure preserves Ghanaian control of PDS in the SPV (as opposed to three separate entities, as is currently the case) and ensure that 51% of the shares in PSD are always held by Ghanaian entity”, it said.
It concluded, “The Ministry trusts that you will oversee the expeditious implementation of the structure outlined above”.
Ken Ofori-Atta’s letter was sequel to a February 7, 2019 letter addressed to Martin Eson–Benjamin, on the 4th Floor of Heritage Tower, Liberation Road – Ambassadorial Plaza, Ridge West Accra signed by Philip Ayesu, as Director of TG Energy Solutions Limited, Kwabena Aidoo, as Director of Santa Power Limited and one Fred Asamany, as Director of GTS Power Limited.
The letter entitled “ECG Private Sector Participation Transaction – Power Distribution Services Ghana Limited” sought to introduce the new companies and author the structure of the shareholding and ownership of PDS.
It read “We refer to the aforementioned transaction pursuant to which the Electricity Company of Ghana Limited (ECG) has agreed to grant a concession for the operation of, management of and investment in, its electricity distribution business to Power Distribution Services Ghana Limited (the Company), (the ECG PSP Transaction).
It aid “Currently, 51% of the shares in the Company (the Ghanaian Shareholding) are held individually by the following Ghanaian shareholders: i. GTS Power Limited – 10%; ii. Santa Power Limited – 13%; and iii TG Energy Solutions Limited – 28%,(together, the Initial Ghanaian Shareholders)”.
It requested that “we would like to take this opportunity to inform you that, in furtherance of the Government of Ghana’s policy regarding local content and participation in the ECG PSP Transaction, the Ghanaian Shareholding is in the process of being consolidated and will be held entirely by a Ghanaian entity (the Ghanaian Entity). The Initial Ghanaian Shareholders are establishing the Ghanaian Entity and will transfer the entirety of the Ghanaian Shareholding to that entity”.
It added that “Furthermore, in addition to the Initial Ghanaian Shareholders the Ghanaian Entity will have three additional shareholders, as follows:i. Ghana Infrastructure Investment Fund; ii.TBK World Plus Limited; and iii Anthony Oteng-Gyasi,
(together with the Initial Ghanaian Shareholders, the Ghanaian Shareholders)”.
It stated that “Whilst the Ghanaian Shareholding will be held entirely and directly by the Ghanaian Entity, the Ghanaian Shareholders’ entitlement to the Ghanaian Shareholding (through the Ghanaian Entity) will be allocated as follows:
TBK World Plus Limited will be entitled to 15%;Anthony Oteng-Gyasi will be entitled to 15%;Ghana Infrastructure Investment Fund will be entitled to 10%;Santa Power Limited will be entitled to 5%;TG Energy Solutions Limited will be entitled to 4%;GTS Power Limited will be entitled to 2%”, adding “we look forward to receiving MiDA’s feedback in respect of the changes outline above and in particular, the information MiDA would require in respect thereof”.
But on the back of government’s suspension of the PDS over what it says were fundamental and material breaches in the payment of demand guarantees by the PDS, the Africa Centre for Energy Policy (ACEP) is calling for the immediate interdiction of the leadership of the MiDA – the implementing agency for Ghana’s Power Compact.
A government statement released on Tuesday had explained that “The decision follows the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further due diligence.
“The Demand Guarantees were key prerequisites for the lease of assets on 1st March, 2019 to secure the assets that were transferred to the concessionaire. The government is conducting a full enquiry into the matter, and the outcome will inform the next course of action”.
It added: “Government has taken steps to ensure distribution, billing and payment services continue uninterrupted. The general public and customers are assured that this development will not interfere with the distribution of electricity services to customers”.
The NPP MP for Adansi-Asokwa, Kobina Tahir Hammond, also called for the prosecution of all those involved in the concession agreement with the PDS, if it is proved that there was fraud.
Reacting to the fallouts, K.T Hammond, who is a former Deputy Energy Minister in the John Agyekum Kufuor regime, said the officials involved in the deal, must be held accountable and prosecuted if further probes find them liable to this “gargantuan fraud.”
The NPP legislator, also sided with the Minority Leader, Haruna Iddrisu’s call for a Parliamentary probe into the scandal.
According to the legislator who is also a Member of the Mines and Energy Committee, the committee raised red flags on the deal, but okayed it due to assurances from the government.