The Daily Graphic front page screaming headline, “Stop Merchant Bank Sale,” on its December 14, 2013 edition, deserves to be commented upon. It reminds me of an earlier one that described in similar fashion the sale of Merchant Bank as “A SCAM.” It is clear that the information provided by the two stories has the potential of raising unnecessary alarm but Graphic is entitled to its own editorial decision to give prominence to the two stories (by way of the titles).

Ghana is building strong institutions upon which our hard won democracy can be stabilised, and I believe we should all be proud of where we are, compared to where we have come from. Naturally, opinions differ, but aren’t we puncturing the integrity of the same institutions we are trying hard to build (with the aid of a section of the media.)

When did we ever question the integrity of the Bank of Ghana so harshly as we have done with the sale of Merchant Bank? When did “Organised Labour” raise red flags so heatedly as is being portrayed by the statement published in the Graphic and carried on other media ?

When did organised labour give ultimatums to the chief regulator mandated by law to handle such transactions? And who should investigate the Bank of Ghana, our known and respected regulator?

Having worked at SSNIT myself, I find it hard to comprehend why the Trust should be treated this way. With the mandate that it has worked with over the years, SSNIT, with the blessing of its board, which includes the TUC, has invested in a number of enterprises. At the same time, SSNIT has divested itself from ventures it no longer considered profitable. I am aware that SG-SSB used to be 100 per cent SSNIT-owned. I am familiar with SSNIT owning majority shares in The Trust Bank. When SSNIT merged the Trust Bank with Ecobank and sold First Atlantic Bank to a foreign company, no investigation was called for because we trusted that Bank of Ghana had done its due diligence as a regulator. SSNIT used to have shares in HFC and later divested itself from that banking institution. Why no noise at the time?

Two years ago, when SSNIT decided to sell its shares to FirstRand of South Africa, there was opposition to it from some political quarters which lamented that the bank was going to ‘foreign hands.’

So what has changed ?

Available records show that former majority shareholder SSNIT/SIC Life had to recapitalise Merchant Bank on two occasions with GH¢200 million since 2007.

According to the SSNIT statement published on November 25, 2013, when FirstRand made an offer late 2012, it requested the shareholders to ‘inject a total of GH¢241 million, while FirstRand offered to pay GH¢140 million for 75 per cent majority shares. In case SSNIT/SIC would not want to inject any more money, which was likely, their shareholding would reduce to only nine per cent.

In the same proposal, in addition to a possible outward flow of over GH¢100 million if SSNIT/SIC had taken up the offer in exchange for the proposed 25 per cent shareholding, FirstRand would not have anything to do with MBG’s debts. The undisputed reality if truth be told was that effectively, we were paying a foreign institution to relieve us of an indigenous asset!

By June, 2013, when the completion period lapsed, the parties had still NOT AGREED, hence there was MUTUAL AGREEMENT to terminate.

New bids, therefore, began pouring in – from SABRE Advisors FZC UK, UT Bank Ghana Limited and FORTIZ Private Equity Fund Limited.

Internationally recognised and reputable KPMG was appointed Transactional Advisors and they returned a verdict in favour of FORTIZ.

What did FORTIZ offer ?

Perhaps what has MISLED, angered and agitated the minds of most interested parties is the often repeated version which says in isolation : “FORTIZ has acquired 90 per cent stake with only GH¢90 million.” That probably gave the impression that the deal was a ‘dash.’

What has not been articulated enough is the fact that FORTIZ offered a PACKAGE to deal with the serious liquidity and capital adequacy ratio (CAR) problems of Merchant Bank. The package binds Fortiz

• To pay GH¢90 million immediately for 90% stake in Merchant Bank, to raise the capital adequacy ratio of the bank from its current 4% to 10%;

• Absolve ALL assets and liabilities;

• Since MBG has a negative value, offer SSNIT/SIC 10% stake in MBG as compensation for the loss in value. (SSNIT/SIC need not pay any monies upfront);

• To inject ANOTHER GH¢50 million by June, 2014 (to sustain the improved Capital Adequacy Ratio of MBG above 10%, eventually increasing SSNIT/SIC stake to between 10 and 20 per cent.

• To aggressively pursue recovery of ALL bad debts;

• To split any debt recoveries above 30% with SSNIT/SIC on a 70:30 ratio basis in favour of SSNIT/SIC;

• Invest in ICT infrastructure to resolve the bank’s ICT challenges; and

• Improve liquidity of MBG.

So where have workers been short-changed? Doesn’t SSNIT come out better at the end of the day?

Is it that ‘organised labour’ and other interested parties have not been fed with the full facts of the offer? It seems likely!

Who is FORTIZ ?

FORTIZ is a USD100 million private equity fund established in June, 2013 to undertake private equity investments in financial, real estate, insurance, education, manufacturing, healthcare and oil and gas sectors. It has the objective to “strategically invest in distressed companies, restructure and revamp them in order to generate long-term growth and profitability.”

The Registrar-General’s Department has all the details. It is a fully-owned Ghanaian company with directors named as Mrs Aurore Selormey, an accomplished accountant and investor (recipient of the Order of the Volta), and Mr Emmanuel Botchwey, Real Estate Developer of REGIMANUEL fame (also a recipient of the Order of the Volta).

The rules of the game allow a company registered the day before to acquire shares on the market. It is not a disqualification. The Bank of Ghana has made this clear in its major statement from the Governor.

According to FORTIZ, and on the recommendation of the stakeholder, it has been recognised that there is the need for a new kind of management team to execute its plans to achieve its return on investment. If it was just recapitalisation, the previous injections by SSNIT would have made the needed difference. SSNIT/SIC Life did the right thing to reconstitute the board of the bank in the past, but did that solve the problem.

The mandated regulator of the Bank of Ghana has indicated he gave approval to the SSNIT-FORTIZ transaction after conducting ‘due diligence’ and giving certain conditions. Some of the conditions being the payment of GH¢90 million into an escrow account by a certain date and providing background information and CVs of new directors of Merchant Bank; two conditions known to have been satisfied.

SSNIT and FORTIZ have signed the necessary Shareholders Agreement. SSNIT has decidedly retired some of its directors, and the new owners are taking inventory and going through transitional issues.

Where comes the “controversy”?

Is it the fact that at some point the then Vice President sat on an appeal from one of those indebted to the bank?

Is it that some critics would have preferred another set of owners of Merchant Bank?

Is it that some politicians risk losing control of the bank because it is an easy source where ‘favoured businessmen’ are directed to take loans?

Isn’t it in Ghana’s interest to privatise assets, like in the case of Ghana Airways and others, where political interference made them non-profitable?

Are we proud of a bank that has limited ICT infrastructure in this day and age, with no ATM cards to offer its customers? Is threatening and chiding the Bank of Ghana the answer?

Is it not in Ghana’s interest to have Ghanaians deciding to pull resources together to rescue some of our distressed “government assets”?

Are we oblivious of the fact that the rage in the media has negative implications to the purse of government by way of losing a significant tax payer should this institution run aground?

Are we unmindful of the fact that the very Social Security and National Insurance Trust whose integrity is being questioned runs the risk of losing significant contributions from close to the 500 staff that Merchant Bank provides a livelihood for as this is the likely outcome should customers continue to lose confidence in the bank on account of the war with words that we are currently witnessing?

Or are we oblivious of the impact this will have on investor confidence if we question the integrity of regulators such as the Central Bank?

All forms of discussion are useful, but they must be based on concrete facts and not on speculation.

Let us exercise our Freedom of Expression and Freedom of the media in full, but for sure, we should exercise respect for one another. We may have our political differences and diverse opinions, but name calling (with insults) does not build a nation. Crucifying ourselves unjustly can only be to the detriment of ourselves as Ghanaians especially if we base such criticism on unfounded assumption. We ought to stay focused on our agenda as a people to build capacity and develop our nation.

The writer is a communication consultant. kojoyankah60@gmail.com