MP accuses finance minister of insider trading, sole sourcing

The Member of Parliament for Bolga Central, Isaac Adongo, is accusing the finance minister, Ken Ofori-Atta, of tap arrangement, insider trading and sole sourcing of the controversial $2.25 billion issued by government.

A tap arrangement is a procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues. The bonds are issued at their original face value, maturity and coupon rate, but sold at the current market price.

Reading from the order book, the Bawku Central MP said the total order received for 15-year bond was GHC3.4 billion, revealing that some GHC4.8 billion did not go through the book building.

“The total orders received for the 7 year bond was GHC1.45 billion. When you add the two you get GHC4.9 billion as the total order. How much did we issue? GHC9.7 billion. So there is a difference of 4.8 billion which didn’t go through the book building.

He questioned the Finance Minister: “How did you issue that which didn’t go through the order.”

Reading from the issuance summary which gives details of the bond transaction, he accused the Finance Minister of doing “behind the scene allotment.”

“This is the issuance summary. It confirms what exactly happened on that day. In the end, if your look at the 7-year bond, the 15-year bond, it tells you the total figures that shows that all the orders that were received that day were accepted.

“And this is the total accumulation of events on that day. It adds up to GHC4.9 billion. Mr Minister, how did you issue the 4.8 difference to get the GHC9.7 billion?”

“What that means is that you then engaged in tap arrangement which is a sole sourcing of GHC4.8 billion from Franklin Templeton.”

He said the Minister was looking for GHC5.3 billion, adding that: “How on earth did you go to the market to look for GHC5.3 billion and ended up with GHC9.7 billion for the people of Ghana.

“How on earth if is not motivated by insider trading?”

“This transaction, contrary to the deception that it confirms investor confidence in the Ghanaian economy, shows the biggest flop in the terms of under subscription because if you raise GHC9.7 billion and your order books gave you GHC4.9[billion]… that is 50 percent undersubscription.

“Is that the way investors show confidence by running away from a bond. Do you go around eventually sole sourcing, bringing somebody to take a bond that even in the first place the amount was not even on the calendar?