Monday, 2 December 2013

The Emperor's New Clothes: The Merchant Bank.....Sale Part Fifty

 Title: Presidency stopped Merchant Bank from recovering debts from company owned by president’s brother

President John Mahama was, according to the documents, deeply involved in the Merchant Bank and his brother's company feud


Struggling state-owned bank, Merchant Bank, may have been stopped from recovering huge debts owed it by Engineers and Planners, a company owned by President John Mahama’s brother.

As the controversy over the sale of Merchant Bank to Fortiz continues, it has emerged that the presidency was petitioned to intervene in the matters surrounding the recovery of huge debts from Engineers and Planners, a company owned by Ibrahim Mahama.

Joy News has documents that suggest lawyer for Engineers and Planners, Tony Lithur, petitioned the President to intervene on the company’s behalf.

The Bank had attempted to recover a debt of $38 million from Engineers and Planners.

The Bank’s board described the debt in a letter to the President, in response to Mr. Lithur’s petition as constituting 30 per cent of its 50 per cent non-performing loan portfolio.

In that letter, the Board refers to various meetings its chairperson had with President John Mahama and his predecessor, the late President John Mills where they were asked on one occasion to explain to President Mahama why they refused to release funds to Engineers and Planners to meet their operational cost.

Joy News’ Evans Mensah, who has been studying the documents, reported that after months of defaulting on its loan, Merchant Bank wrote a final letter to Ibrahim Mahama on 18 June 2012 demanding repayment of a loan the company took from the bank but failed to pay on the due dates. It threatened to resort to legal action to retrieve the money if E&P failed to pay up.

The threat probably triggered a petition to the President through the National Security Advisor by Mr. Lithur dated 4 July 2012 and was received at the office of the President on 13 of July, 2012.

In the petition, Mr Lithur admits the difficulties the company was facing in servicing the loan. He blames it on a revision of the repayment period from five to three years.

He accused the chairperson of Merchant Bank Board, Marian Barnor, of being “bent on destroying the E & P”.

The bank had refused to guarantee a $60 million loan facility from the Africa Export Import Bank, part of which would have been used by Engineers and Planners to pay off its debt to Merchant Bank.

Mr. Lithur asked the President to intervene to “maintain the status quo ante” and to “enable Engineers and Planners take a structured approach to solving its problems with Merchant Bank”.

In a letter dated 3 September 2012, the then Secretary to the President J.K Bebaako-Mensah wrote to the Managing Director of Merchant Bank asking the bank to respond to Tony Lithur’s petition.

The Bank’s board responded in a ten-page letter dated 24 September, 2012.

It referred to various meetings the board chairperson had at the Presidency following earlier reports to the seat of government about the bank’s handling of the Engineers and Planners’ debt.

According to the Board, the first of the meetings was with President John Mahama, who was then Vice-President.

At that meeting, the board chairperson, Mrs Barnor was asked by the Chief of Staff to meet Mr. Mahama to explain why the bank at the time had decided not to release monies to Engineers and Planners to meet operational expenses.

The board also referred to another meeting called by the late President Mills where John Mahama was again present to hear Merchant Bank’s Position on the Africa Export Import Bank loan facility to Engineers and Planners.

The board reiterated its resolve to recover the 38 million dollars borrowed by Engineers and Planners, a debt it described as constituting 30 per cent of the bank’s 50 per cent non-performing loan portfolio.
The board highlighted how the Engineers and Planners debt alone was threatening the survival of Merchant Bank.

The board also highlighted how the loan had been revised downwards from 38 million dollars to 28 million dollars to allow the company to pay up and yet it failed to do so.

It warned of Merchant Bank’s collapse if the loan was not recovered. The board said “a Merchant Bank that collapses will cause systemic risk to the banking sector, there will be loss of pension funds, total erosion of the Ghanaian staff provident fund; loss of jobs etc”.

The board noted that the Engineers and Planners indebtedness was a purely commercial matter and it is “unfortunate that Lithur, Brew and Co, have escalated this to the office of the President.”

The Board members concluded by stating “We leave the matter to the good judgment of his Excellency the President”.

The sale of 90 per cent stake in Merchant Bank to Fortiz Equity Bank has been a subject of intense debate.

Critics say the $90 million deal is murky and designed to help the president's brother and his company to escape being held to pay the debt.

Some opposition New Patriotic Party Members of Parliament have called the deal fraudulent, insisting an earlier offer by First Rand of South Africa and that of UT Bank were far better than Fortiz's. They argued the sale must be abrogated.

Government spokespersons have however hailed the sale. They maintain that the opposition to the acquisition by Fortiz was simply because the President's brother and his E&P firm owed Merchant Bank.

Presidential Staffer, Dr. Clement Apaak and Communications Minister, Dr. Omane Boamah, have both described the deal as good especially because Fortiz is wholly Ghanaian owned.


Source: http://www.myjoyonline.com/business/2013/December-2nd/presidency-stopped-merchant-bank-from-recovering-debts-from-company-owned-by-presidents-brother.php


 

Paulina says: Ghanaian poli-tricks is slowly leaving me........speechless....... I guess its all sooo obvious now... Yep.....folks..... if it looks like a duck, and it walks like a duck..... it is DUCK!!!!! Plus that NAME again..... You know which Name!!!!!!
 
 

1 comment:

  1. I wish Ghanaian men will stop being facebook gangstas and radio parrots (my npp brother) and rise up as a nation and march to protest instead of hiding in their rooms sitting behind computers and ranting. This Timidity passed down from generation to generation has hurt as all as Ghanaians and its becoming hard to move forward, this same Timidity is what affected us when we moved to London and US to work and The obroni bullshyt us in the work place and with our "humility" we took it. If Ghanaian ppl dont rise up and let this ------------ (you will not post the name i have for this man so i wont write it) who is leading the country and have him sit in office till 2016, we are doomed. Have you heard the new songs out Donkomi and the other one i forgot, very befitting. I am not saying we should fight, I am saying we should march like MLK marched for Justice, if the whole nation rose up and Marched the world will see (thank god for social media) just like we saw live in Egypt. I am ready to relocate after 10 yrs in London and 13yrs in Atlanta, but after Nana Lost, i have lost all hope to relocate to set up my business - luxury stationery store, because under the regime of these ..............., i dont think i can take it.

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