UK Financial Institutions Advised to Withdraw from Agyapa Deal

The United Kingdom (UK) Financial Conduct Authority (FCA) has been advised by Transparency International to make detailed investigations into the Government of Ghana’s application to list Agyapa Royalties Limited on the London Stock Exchange to ascertain any discrepancies regarding the deal.

Transparency International further asserted if corruption concerns are not satisfactorily addressed the company should be rejected from the listing. Also, all other persons involved in the deal including the banks and lawyers have been urged to withdraw their engagement.

In a submission to the Financial Conduct Authority (FCA) and forwarded to J.P. Morgan, Bank of America Merrill Lynch International and law firm White and Case, Transparency International detailed concerns shared by a coalition of almost 30 Ghanaian and international civil society organisations that the deal smacks of corruption.

The Executive Director of Ghana Integrity Initiative, the Ghana chapter of Transparency International, Linda Ofori-Kwafo,commenting on the deal intimated that “There are serious red flags in how this deal was set up. Concerns have been raised by civil society actors around minadequate stakeholder consultation, transparency and the valuation of the deal. 

Highlighting some of the issues raised, she opined that “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.”

Following the controversies over the Agyapa deal, the Special Prosecutor at the time, Martin Amidu raised red flags over the risks of money laundering in the deal and possible bid-rigging in the contracting of advisors. Mr Amidu shared his report publicly in November which gave further impetus to the advocacy for a review of the Agyapa Royalties deal.

Some of the findings Mr. Amidu came up with were that the Agyapa deal will rob the chiefs and people of Ghana of their “patrimony as the beneficiaries of the gold extractives” and the earnings from the deal will benefit only a very few members of the President’s Government in perpetuity.

Agyapa Royalties Limited is a Jersey-based special purpose vehicle that would own almost 76 per cent of the royalties generated from 16 large gold mines in Ghana under a scheme that has caused controversy and political fallout in Ghana. Forty-nine per cent of shares in Agyapa Royalties are to be sold through a listing on the London Stock Exchange.

In June 2018, the deal commenced when Parliament passed the Minerals Income Investment Fund (Act 2018) to manage the equity interests in mining companies and also receive royalties on behalf of the Government of Ghana.

Transparency International is a global movement working in over 100 countries to end the injustice of corruption. Also, they focus on issues with the greatest impact on people’s lives and hold the powerful to account for the common good.