MP accuses Ghana’s govt of selling ADB and NIB through backdoor

Financial analyst and Member of Parliament for Bolgatanga Central, Mr Isaac Adongo, has accused the government of attempting to sell state-owned banks ADB Bank and the National Investment Bank (NIB) through the Ghana Amalgamated Trust Limited support package for solvent but undercapitalised indigenous banks.

By supporting private pension funds to invest in five banks, including ADB and NIB, Mr Adongo said the government was covertly ceding the state’s ownership in the two banks to a private entity.

Speaking in an interview with Graphic Oniline, he quipped, “how can ADB, which we were all told that it has been recapitalised, turnaround in a few weeks after and be part of the GAT arrangement?”

“At the extraordinary general meeting of ADB, the shareholders took a decision that the Bank of Ghana (BoG) will convert its liquidity support of GH₵150 million into equity. The shareholders agreed to a renounceable rights issue which meant that they had agreed to bring in additional money to recapitalise,” he stated.

“However, fast forward, we have been told that ADB is now part of a private arrangement under GAT to recapitalise. In other words, the government of Ghana is passing through the backdoor to give ADB to a private entity,” he stated.

Ownership of GAT

He said checks at the Registrar General Department (RGD) indicated that the National Trust Holding Company (NTHC) was a nominee shareholder of GAT on behalf of the government. NTHC, he said, is owned by SSNIT, NIB and SIC Insurance.

“How can an institution owned by state institutions be called private entity? You say GAT is a private arrangement and yet the nominee shareholder is the NTHC so where do the private people come in?” he asked.

“You have indicated that GAT will have the capacity to go unto the market to raise funds, raise bonds and be able to finance its activities so if a government of Ghana entity goes to the stock exchange to raise GH¢2 billion and in raising that money, the pension funds decide to participate, how does that automatically make the pension funds part-owners of the entity they have invested in?

“If the government is borrowing through the GAT to support the banks, how do the people lending the money become owners of the banks?” he further asked.

Isaac Adongo said this was “a clever process” to allow private entities to take up ADB and NIB and therefore called on all Ghanaians to resist the move.
“If Prudential Bank and the rest will allow private individuals to invest to take up stakes in their banks, I don’t have a problem but we as a nation have not taken a decision and have not been told that we are going to sell NIB and ADB,” he noted.

On the issue of NIB, he said the capital position of NIB was in the negative so if an investor was injecting money into the bank to meet the GH¢400 million, “then what stake would the state have in the bank after the exercise?”