Agyapa IPO Suspended

Martin Amidu and Ken Ofori-Atta

The Ministry of Finance has announced it has put on hold the stock market launch of Agyapa Royalties to allow the Office of the Special Prosecutor (OSP) to do corruption risk assessment on the transaction.

The Deputy Finance Minister, Charles Adu Boahene, in a letter to the OSP, stated that the ministry was not proceeding on with the Initial Public Offering (IPO) as planned and was ready to cooperate with the anti-graft office since it would be “detrimental to proceed without receiving the necessary approvals.”

“The ministry does not intend to proceed with the IPO ahead of the results of the corruption risk assessment by your office,” the letter said.

It indicated that “the international investor community has been closely monitoring the outcome of the current state of the transaction and, it would, therefore, be detrimental to proceed without receiving the necessary approvals and green light from your office.”

“Additionally, we will be required to fully disclose in the prospectus to the transaction, the outcome of any investigation by your office prior to approval by the respective regulators of stock exchanges in Ghana and the United Kingdom,” the ministry noted.

Also, it indicated that it was prepared to provide any further information or clarification to the anti-graft body for its work on the Agyapa deal, while pointing out that the Ministry had furnished the OSP with the relevant documents needed to undertake its investigation.

 

Background

The Special Prosecutor (SP), Martin Amidu, requested the ministry to suspend the stock market launch of Agyapa Royalties to enable his outfit to do corruption risk assessment on the transaction.

The SP, in a letter, said non-submission of the information and documents by the ministry on the deal as requested had delayed the risk assessment.

“The information and documents you supplied concerned mainly the processes for and the appointment of the Transaction Advisors which goes to the root of any corruption risk assessment,” Mr. Amidu stated in the letter.

According to him, the information and documents relating to the identification and recommendation by the transaction advisors to the Finance Ministry for the appointment of other services providers and or underwriters that may be required to complete the transaction as provided in clause 2.2.1 of the mandate agreement are critical to any through corruption risk assessment.

He added that the legal opinions, particularly of the principal legal advisor to the government under the Constitution, “are relevant to ensure compliance with her recommendations as part of any corruption risk assessment.”

Mr. Amidu urged the Finance Ministry to abide by the results of the corruption risk assessment it is undertaking on the transaction before the ministry moves to the launch of the IPO transaction.

“This office makes this suggestion on the grounds of prudence on your part and to also not give the impression that the mandate of this Office on prevention of corruption is of no consequence to the transaction,” the SP indicated.

“This Office would have wished to complete its corruption risk assessment on the Agyapa Royalties Transaction soonest but for the non-submission of the information and documents pending to be submitted by your Ministry,” the letter stressed.

 

Main Deal

The government’s decision to consolidate all the country’s potential mineral income in one fund and largely managed by a special purpose vehicle (SPV) called Agyapa Royalties has generated controversy, despite copious explanation by the Finance Ministry that Agyapa Minerals Limited is 100 per cent owned by Minerals Income Investment Fund (MIIF) Act, 2018 (Act 978), which is also 100 per cent owned by government, and that there are no ‘hidden beneficiaries’.

A group calling itself an Alliance of Civil Society Organizations (CSOs) then claimed that some elements in the government have ‘huge’ interests in the whole deal but could not name those with the ‘interests’ and said there had not been what they claimed to be ‘full disclosure’ on those behind the SPV (Agyapa Royalties) despite the deal going through Parliament before MIIF was empowered to commence the whole action.

 

Ken’s Take

Finance Minister Ken Ofori-Atta later insisted that there are no hidden shareholders, saying, “It is a clean transaction as far as I know and we’re just looking for ways to maximise value and to play in the game that our multinationals play and now we have the skill set to be able to do that.”

He said, “As far as I know, it (Agyapa Royalties deal) has been as transparent as you can see it; it’s gone through Parliament on many levels, gone through Cabinet on many levels and there’s truly nothing to hide except creating something new that may be uncomfortable but it is something new that is going to stand us in great order.”

 

By Ernest Kofi Adu