The Ministry of Finance has announced that government will not advance with the Initial Public Offering (IPO) for the Agyapa Royalties deal until an ongoing corruption risk assessment by the Special Prosecutor, Martin Amidu, is finalized.
The Ministry, in a letter signed by a Deputy Finance Minister, Charles Adu Boahene said, the initial plan to launch the IPO in September has been put on hold and gave an assurance of its readiness to work with the Special Prosecutor’s office.
The Finance Ministry also agreed with Mr Amidu’s office that more transparency is necessary to bolster the integrity of the already controversial deal.
“The Ministry does not intend to proceed with the IPO ahead of the results of the corruption risk assessment by your Office.
“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 added that it is on standby “to provide any further information or clarification” for the Special Prosecutor’s risk assessment.
The Agyapa deal – a by-product of the Minerals Income Investment Fund Act -was passed into an Act by Parliament in June 2018 to manage the equity interests in mining companies and also receive royalties on behalf of the Government of Ghana.
The Minerals Income Investment Fund is mandated to manage and invest these royalties and revenue it receives on behalf of Ghana and invest them for higher returns. To do this, the law enables the Fund to establish Special Purpose Vehicles (SPVs) to appropriate these investments.
In July 2020, the government introduced an amendment to the Act to ensure that the SPVs that the Fund would establish to manage investments get unrestricted independence.
On the back of the amendment and the original provisions of the act, the Minerals Income Investment Fund set up an offshore limited liability company known as Agyapa Royalties Limited (previously Asaase Royalties Limited).
The Agyapa Royalties Ltd is incorporated in Bailieick of Jersey in the UK, a tax haven. It has been incorporated in a tax haven to cut out the associated high tax charges to the returns that will accrue to the state from the investments.
The Special Prosecutor, Martin Amidu, wrote to the Ministry of Finance recommending it suspends the issuance of the IPO until his office receives crucial documents that will aid the corruption risk assessment.
Mr. Amidu has received information regarding the processes for and the appointment of the Transaction Advisors but also wants information and documents relating to the identification and recommendation by the transaction advisors.
The Finance Ministry in its latest letter revealed it has provided the Special Prosecutor with relevant documents relevant to the appointment of the Transaction Advisors and the opinion of the principal legal advisor to Government, among others.
The deal has received a lot of backlash especially from the minority with some critics insisting the deal is problematic even with the prosecutor’s assessment.
The Alliance of Civil Society Organizations working in Extractive, Anti-Corruption and Good Governance, says it will continue to kick against the deal despite the move by the Special Prosecutor to get the implementation process suspended.