28th September 2012

President Mahama Must Come Clean On His Position On Firstrand Takeover Of Merchant Bank

Last week, the New Patriotic Party raised pertinent issues concerning a potential threat to the pension funds of workers held by SSNIT. As has by now been revealed, a negotiated takeover of Merchant Bank Ghana Ltd, which SSNIT is a 98% shareholder, includes an unacceptable provision that SSNIT takes over the bad debt portfolio of the bank, estimated to be some GH¢160 million of the bank’s GH¢330 million worth of advances to its customers, owed by only five customers.

Whilst the NPP believes that the intense national debate surrounding the revelations should lead to a change of heart on the part of the Government of Ghana and Merchant Bank, we are very disturbed that, in spite of the anxiety that this deal is causing Ghanaian workers and pensioners, the President of the Republic and the Board of the Directors of Merchant Bank have not come out clearly to explain the facts to the public.

On behalf of the workers and pensioners of Ghana, the NPP is asking the following questions:-
1. What is the actual position of President John Dramani Mahama (who holds the ultimate fiduciary duty to SSNIT contributors) on this FirstRand takeover bid?
2. Is the Board of Directors of Merchant Bank still committed to this transaction, as we are being told by our sources close to the board?
3. Is the deal still on and if so in what form?
4. Is the Bank still committed to ring-fencing the bad debt with workers’ pension so as to save the FirstRand takeover bid?
5. What is the guarantee that the newly set-up Merchant Assets Recovery Trust can collect payments on the non-performing loans which the Bank itself has not been able to do?
President J D Mahama must show decisiveness on this matter. It is not good enough that not a single illuminating official word has come from the Presidency as to what the position of the government is. Instead, it has been left to a few journalists and social commentators to speculate on Government’s position this very important national issue. We call on the President to use his position as the ultimate custodian of the public purse to either call off this deal or cause for a variation that does not endanger the welfare of SSNIT contributors, including our struggling pensioners.

We call on the President to state his position on the decision by Merchant Bank to set up a non-banking vehicle called Merchant Assets Recovery Trust (MARP), with SSNIT owning 98% and SIC Life 2%, which is now to be tasked to chase after Merchant Bank’s bad debt?

We believe this clarification from both the Board of Merchant Bank and the Presidency is important to set anxious workers minds at rest because beyond the acerbic government statement generally seeking to selectively react to the NPP press conference, no clear statement of intent as to the true state of affairs relative to SSNIT’s reported takeover of the debts has been forthcoming.

We reiterate that the NPP, the champion of the private sector and indigenous business, have nothing against successful private sector players. But, on no account should workers’ pension funds be jeopardized for the sake of private individuals under the watch of the President. It is in the interest of the President to demonstrate transparency and accountability, especially since one of the major actors involved is his own brother, the CEO of Engineers and Planners, which is responsible for 19.2% (or GH¢57.2m) of Merchant Bank’s entire lending assets.

The workers of Ghana demand answers and no amount of diversionary propaganda that this is a needless attack on the brother of the President will change the situation that at the core of this issue is the protection of pension funds of the hard working people of Ghana.

The substantive questions are begging for substantive answers.

Yaw Buaben Asamoa
Deputy Communications Director in Charge of Governance and Administrative Justice, NPP
(+233209371755)