The controversy surrounding alleged “sweetheart” foreign exchange deals between Fidelity Bank Ghana Ltd (Fidelity Bank) and the Electricity Company of Ghana (ECG) has intensified as both parties remain steadfast in their positions, leading to potential legal action.
The legal back-and-forth, suggests a protracted battle between the two parties, leaving the outcome uncertain as ECG Managing Director, Samuel Dubik Masubir Mahama, is unwilling to justify the number he supplied tothe Cash Waterfall Mechanism Committee of the Public Utilities Regulatory Commission (PURC).
In a detailed statement, Fidelity Bank, vehemently denies the allegations made by public interest advocate Bright Simons. However, lawyers for Mr Simons, maintain that the suggestion of “sweetheart” forex deals is based on clear and incontrovertible information supplied by ECG to the Cash Waterfall Mechanism Committee.
The bank had asserted that the information was false and misleading, emphasizing that all foreign exchange deals with ECG, were conducted at prevailing market rates.
Fidelity Bank states that, funds were sourced from both the Bank of Ghana and the open market in 2023, and transactions were in full compliance with regulatory requirements.
Fidelity Bank, has since instructed its solicitors, Ayine & Partners led by Dr Dominic Akuritinga Ayiene, to demand an immediate retraction of the publication and an unqualified apology from Bright Simons. The bank warns of legal action against the author and others who have published the alleged false statements.
“Our attention has been drawn to Bright Simons’ publication on X where he alleged that ECG was “dishing out” 80 Million Ghana Cedis for free to Fidelity Bank in “Sweetheart” Exchange rate deals. We categorically state that this information is false and misleading and we have not had any FX deal with ECG at a rate that is not in line with the prevailing market rate”, Fidelity Bank said.
It explained that “Fidelity Bank Ghana Limited did source for foreign exchange on behalf of ECG in 2023, and the sources of the funds were from both Bank of Ghana and the open market. Funds sourced from the Bank of Ghana by Fidelity Bank on behalf of ECG were sold to ECG at the same rate it was sourced, as per the Bank of Ghana requirements.
“We have all records of transactions with ECG and would like to emphasize that no foreign exchange has ever been sold to ECG above the market rates, and in some instances, they were sold significantly below the market rate” adding, “all records are also available at the Central Bank and can be verified”.
“We wish to state that owing to the false and misleading publication by Bright Simons and its negative impact on the Bank, we have instructed our Solicitors to demand the immediate retraction of the publication and an unqualified apology from the author, Bright Simons”.
“We have further instructed our Solicitors to commence legal action against the author and all other persons who have published the said false statement, in the event that the author fails to comply with our demand.
“We hereby urge all persons, groups and media outlets to desist from further publishing the false statement as doing so may be legally actionable.
“We are dedicated to providing high-quality products/services and maintaining strong relationships with all stakeholders, and we encourage our customers to continue believing in us”.
However, Bright Simons, in response to Fidelity Bank’s statement, through his lawyers, categorically denied the bank’s claims, and maintained that the suggestion of “sweetheart” forex deals is based on clear and incontrovertible information supplied by ECG to the Cash Waterfall Mechanism Committee.
They insisted that the “documentation reveals that ECG purchased $43 million at an exchange rate of more than 13.95 GHS to a Dollar in October 2023, leading to an estimated loss of 80 Million GHS.
Bright Simons’ legal team, also highlights ongoing investigations by policy think tanks IMANI and ACEP into the dealings of energy sector state-owned enterprises, including ECG. They emphasize their commitment to updating the public on developments.
Solicitors of Bright Simons, a public interest advocate and policy activist, responded to Fidelity Bank on March 04, 2024 and categorically denied the Bank’s claims that the allegations made by Bright Simons on Twitter are false and without factual basis.
They reiterated the position that the suggestion of “sweetheart” forex deals was based on clear and incontrovertible information supplied by ECG to the Cash Waterfall Mechanism Committee.
“In December 2023, ECG stated that it purchased $43 million at an exchange rate of more than 13.95 GHS to the Dollar in October 2023. Based on the prevailing rate at the time of roughly 11.5 GHS to 1 USD, ACEP and IMANI have estimated that ECG lost 80 Million GHS on the transaction.
Bright Simons’ lawyers and representatives, have also indicated that investigations by IMANI and ACEP into this matter, and several others related to the dealings of energy sector state-owned enterprises (like ECG) with various parties, which account for the ongoing challenges being experienced in the energy sector, continue unabated. The public shall be updated on developments as and when they occur, they added.
But a letter from Fidelity Bank’s lawyers to Bright Simons, requesting an immediate retraction of the alleged false post, warning of legal action if not complied with.
In response, Bright Simons’ legal representatives assert that the allegations are not only true, but supported by evidence.
“We act as lawyers for Fidelity Bank Ghana Ltd (hereinafter simply referred to as “Fidelity” or “our client”) and have the instructions of our client to write to you in respect of the above subject.
The Fidelity Bank letter bearing Dr Ayiene’s signature said “Our instructions are that on March 2, 2024, you took to X (formerly Twitter) to allege that the Electricity Company of Ghana (“ECG”) was “dishing out” Eighty Million Ghana Cedis (GH¢80,000,000.00) for free to Fidelity in what you described as “sweetheart exchange rate deals”. The allegation that our client entered into “sweetheart” foreign exchange transactions with ECG sought to impugn the integrity not only of ECG but also of our client.
“Our further instructions are that the allegation is false, misleading and without any factual basis. Whilst it is true that our client did some foreign exchange from the Bank of Ghana and the open foreign exchange market on behalf of ECG in 2023, our client sold the sourced foreign exchange funds to ECG at the same rate as the rates quoted by the Bank of Ghana.
“In relation to foreign exchange sourced on the open market, all were sold at the market rate and met Central Bank regulations. Our client’s records show that it has never sold and foreign exchange to ECG above the market rate. Indeed, in some instances, our client has sold foreign exchange to ECG at rates significantly below the prevailing rates in the open market.
“As a bank, our client is obligated by law to report all its foreign exchange transactions to the Bank of Ghana in compliance with existing regulations on such reporting requirements and all records of its foreign exchange dealings with ECG are available at the Bank of Ghana.
“In view of the false and misleading nature of the information which you put out in your said post on March 2, 2024, we have the instructions of our client to demand from you, which we hereby do, the immediate retraction of the content of the said post to avoid any further damage to the sterling reputation of our client in the banking industry and also that you apologize to our client for the injury to its reputation.
“We are under further instructions from our client to serve notice, which we hereby do that, if you fail to immediately retract the said post, our client shall have no option than to institute legal action in court against you for damages and other relief for the injury to its reputation caused by your publication.
“Please do not hesitate to revert to us for clarification on anything we have said on behalf of our client in relation to the above matter”.
