The Minority National Democratic Congress (NDC) in Parliament has disclosed that members of the House had less than 4 hours to scrutinize documents on the Agyapa Royalty Limited transaction.
According to the Minority, MPs were not afforded time to ascertain the extent to which the transaction would enhance the welfare of the Ghanaian people and in particular its ramifications on the national revenue into the future.
The Minority said it took a strong position in the national interest that the indecent haste with which such high-stakes agreements were being rushed through the parliamentary approval process does not augur well for the important exercise of Parliamentary oversight on an issue as critical as the mortgaging of the gold royalties of the country in perpetuity.
Minority leader Haruna Iddrisu who addressed the matter at a news conference at the party headquarters in Accra yesterday, noted that the government claims to have used two years to prepare these agreements and yet MPs, the representatives of the people, were required to peruse and approve the same agreements in less than four hours.
He indicated that as part of the its duty as a Minority to ensure such agreements meet key legal and constitutional requirements before approval, the Minority requested the full complement of requisite documents to guide and facilitate due diligence and thorough scrutiny of the deal.
“Key amongst these requisite documents was the prospectus for the eventual sale of shares in Agyapa through an Initial Public Offering (IPO) on the London Stock Exchange. The prospectus would contain more important details of the deal such as projected cashflows, underlying assumptions and the dividend policy.
“Incorporation details for the SPV, Agyapa Royalties; detailed justification for the choice of Jersey, a known tax haven; and the fiscal impact assessment,” he said.
According to the Minority leader, the Minister of Finance shockingly refused to make these key documents available on the excuse that they were in draft form and for reasons of confidentiality, could not to be shared even with the elected representatives of the people of Ghana.
“This decision of the Finance Minister is in clear violation of Article 181(5) of the Constitution which requires that such documents together with the agreements be laid before Parliament for approval.
“As a direct consequence of this concealment of vital information from the people of Ghana, the debate on the floor of Parliament was extremely acrimonious, and eventually, the Members of the Minority in Parliament were compelled to stage a walk out as a clear statement of our intent to protect the national interest at all cost,” he added.
Termination of Agyapa deal
Mr Haruna Iddrisu warned that a future NDC government will not honour the terms of the Agyapa agreement as described by the current Attorney-General.
He averred that the decision to mortgage Ghana’s future mineral royalties in perpetuity is grossly inimical to the interest of the people of Ghana and runs contrary to the constitutional imperative that governmental power be exercised for the welfare of the people of Ghana.
“This deal fails to enhance public welfare. Our analysis shows clearly that Ghana stands to lose billions of United States Dollars in revenue as a consequence of this illegal transaction.”
“This is because annual gold royalties from the mining sector amounts to about US$200 Million on the average. It makes no economic sense, therefore, to mortgage these receivables to an opaque Special Purpose Vehicle (SPV) in exchange for an upfront amount of just US$500 million.”
He observed that the use of a tax haven as location for an investment fund while under AML scrutiny is risky for Ghana and indicated that the Minority will notify the London Stock Exchange and the Financial Conduct Authority that the Agyapa Royalty agreement does not meet the required due diligence and transparency and that a substantial level of conflict of interest runs through the structuring of the agreement.
The Minority and the NDC, he said, completely disassociate themselves from the proposed relationship agreement and subsequent flotation of shares on the London Stock Exchange, and stressed a future NDC Government will have no choice but to review the Relationship Agreement and the other accompanying approvals.