[ 2019-03-07 ]

Minority won't back 'illegally formed' GAT to seek sovereign guarantee
The Minority in Parliament says
government’s decision to establish the
Ghana Amalgamated Trust (GAT) to help some local
banks meet minimum capital is illegal.

Deputy Minority Leader, James Klutse Avedzi, says
unless government properly establishes the Trust
by seeking parliamentary approval, they will not
back the request for a sovereign guarantee.

“We have few issues that need to be
clarified and the committee which is still working
on that is demanding number of documentations.
First of all, GAT is alien to Parliament and we
don’t know what it is…is it a company
set up by who?

“Why do you introduce a company that is
alien to Parliament and bring it for us to work
and give it a sovereign guarantee to go and borrow
money,” he quizzed.

GAT’s formation and debt sale come in the
closing stages of a sector cleanup during which
lenders had to raise their capital holdings, a
process which cut the number of banks by almost a
third to 23.

Government created it as a special-purpose vehicle
which will use a debt sale’s proceeds to
purchase shares in five lenders and help them meet
a minimum capital threshold of GH¢400 million.

Government is to start a debt sale this month to
prop up lenders as authorities seek ¢2 billion
($403 million) in finance for undercapitalized
banks.

Related: Ghana to start $403m debt sale for GAT
Feb.18

Finance Minister, Ken Ofori-Atta

The beneficiaries are National Investment Bank
Ltd., Agricultural Development Bank Ltd. UMB Bank
Ltd., Prudential Bank Ltd. and the merged entity
of BSIC Ghana and Omni Bank Ltd.

But the NDC MPs say they will not support plans by
government to get parliamentary approval for a
¢2 billion sovereign bond for the initiative.

Their action follows the Finance Minister, Ken
Ofori Atta, laying a document in Parliament
requesting approval for the sovereign guarantee on
Friday, which has been referred to the Finance
Committee.

He explained that when government went for bond
for Energy Sector Levy Act (ESLA), the
special-purpose vehicle used to raise funds for
the energy sector, its basis was the Act passed by
Parliament.

Mr Avedzi said ESLA has the legal backing to go
and raise a bond or loan.

“In this case, we have not established or
given the authority to government to establish any
company for Ghana,” he stated.

The Ketu North MP said the Minority will raise an
objection when the time comes for the debate for
such approval, for the records to capture that.

He also raised other issues related to GAT
questioning the selection criteria of the banks
which were deemed to have qualified.

“Are they the only companies that need
support? What is the legal basis for that,”
he queried

Source - Myjoyonline

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