The Herald’s continuous investigation into the Power Distribution Services (PDS) transaction, has revealed details of the Ghanaian lawyers who worked on the deal that handed away the country’s strategic assets; The Electricity Company of Ghana (ECG) to a group of friends, politicians, businessmen connected to the Akufo-Addo administration.
Among the chilling details, is the revelation that one of the law firms; Minkah-Premo, made a whopping US$4 million from the transaction from the PDS Consortium made up of TG Energy Solutions, Santa Power Limited, GTS Power Limited, A Energia-Angola and the Manila Electric Company from Philippine also known as Meralco.
Another shocking discovery is that President Akufo-Addo’s private law firm; Akufo-Addo Prempeh & Co, is also deeply involved in the transaction and got awarded legal contract to execute for the government, instead of the procedure of using the Minister of Justice and Attorney-General.
It is not clear, how much government is paying to the President’s law firm. It is also unclear, what the law firm’s scope of work was and whether or not the contract was advertised ahead of the selection of the President’s law firm.
The other two law firms mentioned are; Ace Ankomah’s Bentsi–Enchill, Letsa &Ankomah law firm, Sam Okudzeto & Associates law firm. The four law firms were involved in the deal.
Questions have been raised as to the expert advice which went into the agreement ahead of the parliamentary approval processes which has Kobina Tahir Hammond, the Member of Parliament for Adansi-Asokwa in the Ashanti Region, in an unusual manner breaking ranks from his colleagues on the Majority New Patriotic Party (NPP) side in Parliament.
The Herald captured Sophia Kokor, formerly of Gabby Asare Otchere–Darko’s Danquah Institute (DI) is the Secretary of PDS, while serving as a Director on TG Energy Solutions, as well as a lawyer in the law firm of Minkah-Premo, where the US$4 million juicy legal contracts had gone, with some lawyers in the firm already smiling to the bank.
People familiar with the deal disclosed that it had come from PDS to Minkah-Premo. The firm has since become legal advisors to PDS and is on the PDS board, which has Philip Ayesu of X-Men Barbershop as its chairman and Sophia Korkor, as Board Secretary.
Interestingly, Sophia is performing quadruple role. She is a part-owner of TG Energy Solutions, as well as legal advisor to PDS per the arrangement under the consortium, but also serves as board secretary. She is well known at X-Men Barbershop in East Legon.
Sophia is on record to have brokered one of the juiciest legal deals in the history of Minkah-Premo Law firm also known as Akosombo Chambers. So, lucrative is the deal that, The Herald gathered only the respected Justice Kusi-Minkah-Premo himself worked on it together with Sophia. Her connection ties to the Akufo-Addo family was the biggest advantage.
Also in the PDS loop is Lawyer Akoto Ampaw from Akufo-Addo, Prempeh and Co. A law firm owned by President Akufo-Addo. Lawyer Akoto Ampaw has a couple of times even acted as a lawyer for the President with the most notable being the Election Petition Hearing in 2013.
Indeed, a letter authored by Ken Ofori-Atta and cited by The Herald, confirms the Minister of Finance at one point appointed Lawyer AkotoAmpaw as “Chairman of Negotiation Committee of ECG-PSP to repackage “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”.
The 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”
Ace Ankomah’s law firm, as well as Sam Okudzeto’s law firm, have been mentioned to have taken part in the transaction for and on behalf of the International Financial Corporation (IFC) and Millennium Development Authority (MIDA).
It is not clear, what exactly they did in the transaction, but many have connected IFC to the due diligence which has been faulted.
Ace Ankomah is a known friend of Philip Ayesu, but it is not clear if their friendship influenced the involvement of his law firm.
It’s also unclear if Ace Ankomah personally worked on the transaction. The Herald is working on getting the legal fees of Ace Ankomah’s law firm with respect to the transaction, but many have said it is normally tied to the amount involved in the agreement, and it could run into several hundreds of thousands of United States dollars.
Meanwhile, The NPP MP for the Assin Central Constituency in the Central Region, Kennedy Ohene Agyapong, launched a blistering attack on cronies of the government, who have been cited in the PDS deal which has been described by the Minister of Information ,Kojo Oppong Nkrumah, Minister of Energy Peter Amewu and his Deputy, Owuraku Aidoo as fraudulent, saying he is “so disappointed”. ‘
He said he was equally shocked and disappointed at the level of “grabbing “grabbing” in the Akufo-Addo-led government, especially in the PDS scandal and asked Ghanaians to demand from the individuals complicated why they have not fulfilled their part of the bargain.
The NPP MP is livid because he cannot come to terms with how a party that prides itself as incorruptible, is entrapped in a deal which from all indications short-changed Ghanaians.
His checks he claims, have revealed that individuals behind PDS, who have taken over the running of electricity distribution have not paid a “dime” as demanded of them in the contract.
Mr Agyapong, who made the disclosure on his Net2 television network said, it was unacceptable for owners of PDS, who own 51 percent, to refuse payment of sums of money required of them, but be allowed to continue operating a very important and strategic asset until government suspended the consortium last week.
Speaking in his usual angry and outraged fashion, Mr Agyapong, who was disinterested in the official reason for the suspension, went on to challenge President Akufo-Addo, to ensure the deal is not reverted to PDS until they fulfil their part of the contract and all issues cleared.
The controversial MP’s outrage comes on the heels of government’s sudden claim of monumental fraud in the privately owned PDS takeover in March, which has warranted the suspension of the ECG takeover, while investigations are conducted.
Meanwhile, Herald investigation has revealed that for the five months that PDS operated in the electricity sector, it raked in a total of GHc2billion and lodged the said money in a CAL Bank account. But this paper could not tell whether the money was intact as at the time the takeover was done considering the revelations that have come up since the reversion.
Mr Agyapong said it was imperative that he speaks out because he wants to be on the side of Ghana than government or his party and that he will choose to speak out as he fears no death.
He tasked the President to sit up and demand the right things be done otherwise; he would have no business, attempting to prosecute members of the opposition National Democratic Congress (NDC).
According to him, what has transpired in the PDS fraud cannot in any way be described as promoting entrepreneurship.
He said, the greed that was exhibited in the scandal was outrageously nauseating, adding he could not sit aloof, while illegality is being perpetuated on Ghanaians by a few individuals.
“If you do this how can you prosecute NDC? You can kill me today but I tell you that they should take the 51 percent from them they haven’t pay any dime and read my lips and it for our country it is not for any individual that you are beautiful that you grab grab grab.
What, I am so disappointed! Come on it is Ghana! It is Ghana we will live! But when they do this, do they forget that death awaits us? Some of the names I have, they are very good businessmen, they have lived their lives well, so why would they involve themselves in this to tarnish your hard earned reputation?
Me, Kennedy Agyapong, I won’t do it and they cannot even approach me because my conscience is Ghana first and not any individual you can be anybody I serve my country. So President, since you have cancelled the deal, demand the percentage that they have to pay that is not how we promote entrepreneurship”, he concluded.
The Executive Director of the Ghana Centre for Democratic Development (CDD), H. Kwasi Prempeh, has raised concerns over the national power supply takeover by PDS from the ECG.
The government of Ghana recently suspended its concession agreement with PDS. The decision was communicated via a press release by the Information Minister on Tuesday, July 30, 2019.
The statement said the action to put the agreement on hold was necessitated by “the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence”.
The government said a full probe has been initiated into the agreement and steps have been taken to ensure that “distribution, billing and payment services continue uninterrupted”.
Commenting on the issue in a write-up, Professor Prempeh observed that: “The national interest is not served when cronyism and self-dealing are packaged and presented for popular consumption as economic nationalism. Using public power to enable or facilitate the transfer of public wealth into a few private hands is not ‘nationalistic’ or ‘patriotic’ merely because the chosen beneficiaries are fellow nationals”.
Even though he encouraged private investments by Ghanaians, he was quick to add that such transactions must be done rightly.
For him, “we cannot afford and must not countenance the creation of a Ghanaian version of ‘Russian oligarchs’ in this town”.
As a result of the PDS debacle, Finance Expert and former Executive Director of the Standard Chartered Bank, Alex Mould, has reiterated calls for the need to set up a trustee to manage the power sector revenue collection account.
The status quo (current funds collection and distribution mechanism), according to him, is flawed with deliberate delays which caused unnecessary float interest revenue for the collecting company (then ECG and now PDS).
That, he alleged, was all done in collusion with the banks which enriches them (the Banks and PDS (ECG)) at the expense of the other power sector service providers who are always short of cash (liquidity). Additionally, he called for the urgent need for the institution of a Cash Waterfall Mechanism (CWM) to prevent the growth of the energy sector-wide indebtedness.
CWM, Mr Mould explained, is a protocol to ensure that all players in the Power sector value chain that supplies electricity to our homes, offices and Industry are paid on time without the unnecessary interference by government or any institution that collects the revenue on behalf of the service providers.
In July 2017, Cabinet approved the implementation of CWM as a new revenue distribution system to address the increasing legacy debts in the energy sector. This mechanism is part of a wider strategy to ensure an equitable distribution of energy sector revenues to all stakeholders in the value chain. But Mr Mould in an interview alleged: “there seems to be some reluctance by the Finance Minister to set up the Collection Account and also set up an agreed protocol for the distribution of the proceeds on a timely basis to the service providers in the power sector.”
He said there was no other reason for “this self-imposed inertia apart from the fact that this is part of the jigsaw puzzle in the grand scheme to perpetuate State Capture in the Power Sector.”
Mr Mould, who is also the immediate past Chief Executive of the Ghana National Petroleum Corporation (GNPC) claimed that the main interest of the PDS, was to control and profit from the liquidity generated from the sale of electricity.
“PDS plans doing this by having one or two banks handling all its cash collections and thus be able to control the liquidity generated by the power sector to the detriment of the power service providers like VRA, GRIDCo, the Independent Power Producers and the Fuel Suppliers i.e Ghana Gas, GNPC and NGas,” he added.
He stated that the power sector revenue collection account had not been set up nor “have the procedures and protocols for payments to the service providers in the power sector value chain been set up. “This should be managed by a Trustee comprising of the major players in the industry which seeks the interest of the viability of the players in the power sector with the goal of restoring the much needed financial credibility and creditworthiness.”
The delay, according to him, was causing further delays in payments to the main players in the value chain “which translates in higher financial costs and lack of liquidity to carry out their businesses effectively and efficiently.”
That, Mr Mould, said was a breach of one of the conditions set by the World Bank in order to assist in improving the efficiency of the Power Sector.
“One of the conditions by the World Bank to assist in improving the efficiency of the power sector was to ensure that the right tariffs were paid and that an efficient payment mechanism is set up,” he recollected.
Source: theheraldghana.com
