International anti-corruption organization, Transparency International (TI) is urging financial institutions and lawyers in the UK who are involved in the controversial Agyapa mineral royalties deal to withdraw their interests.
The organization has also written to the UK Financial Conduct Authority (FCA) to reject the application to list Agyapa Royalties Limited on the London Stock Exchange if concerns about corruption in the deal are not “satisfactorily addressed.”
TI in a blog post on its website on Tuesday December 22, 2020 said it had forwarded a copy of its submission to J.P. Morgan, Bank of America Merrill Lynch International and law firm White and Case.
The post said its case to the financial institutions and law firms was the position of some 30 Ghanaian and international civil society organisations that the deal smacks of corruption.
“Transparency International has urged the UK Financial Conduct Authority (FCA) to make detailed inquiries into the Government of Ghana’s application to list Agyapa Royalties Limited on the London Stock Exchange, and to reject the listing if corruption concerns are not satisfactorily addressed. The banks and lawyers involved in the deal have also been urged to withdraw their engagement,” excerpts of the post read.
The post said although the various CSOs held the view that the deal presented conditions rife for corruption, that position was strengthened by the revelations of the former special prosecutor, Martin Amidu in his corruption risk assessment which “raised red flags over the risks of money laundering in the deal and possible bid-rigging in the contracting of advisors.”
TI said Amidu’s work “gave further impetus to the advocacy for a review of the Agyapa Royalties deal.”
Linda Ofori-Kwafo, Executive Director of Ghana Integrity Initiative, the Ghana chapter of Transparency International said the nature of the concerns raised about the deal requires that the stakeholders, especially the financial institutions in the west take them very seriously and act.
“There are serious red flags in how this deal was set up. Concerns have been raised by civil society actors around inadequate stakeholder consultation, transparency and the valuation of the deal. Other concerns bother on the way transaction advisors became involved in the process and a lack of public oversight over the company at the heart of the deal. It is crucial for Ghana that the western financial institutions and regulators involved in this deal take these concerns seriously. They must not facilitate schemes that may end up plundering Ghana’s mineral resources in the name of investment,” she said.
Minority to report Agyapa
The minority in Parliament had earlier given indications that it will report the “risky” Agyapa Royalties deal to the London Stock Exchange.
Aside from issues with transparency, the Minority raised conflict of interest issues with the deal.
Parliament passed the Minerals Income Investment Fund Act 2018 which establishes the Fund to manage the equity interests of Ghana in mining companies and receive royalties on behalf of the government.
The fund is to manage and invest these royalties and revenue from equities for higher returns for the benefit of the country.
The government then, through the Minerals Income Investment Fund (MIIF), set up Agyapa Royalties Limited to securitize Ghana’s gold royalties.
This was after Parliament on August 14, approved the Agyapa Mineral Royalty Limited agreement with the government of Ghana despite the walkout by the Minority.
In exchange, the company plans to raise between $500 million and $750 million for the Government on the Ghana and London Stock exchanges to invest in developmental projects.
The move has since been heavily criticized as the government has directed that further discussions on it be suspended.