Minority Dares Govt to Probe Telecom Malaysia Deal

Nov 06, 2009 (Ghanaian Chronicle/All Africa Global Media via COMTEX) -- VOD | Quote | Chart | News | PowerRating -- Ongoing debate and pronouncement by the ruling National Democratic Congress (NDC) to re-engage Vodafone Plc in its acquisition of 70% shares in Ghana Telecom (GT) has sparked the reaction of the opposition New Patriotic Party (NPP) .

The minority is daring government to first consider investigations into the sale and purchase Agreement (SPA) of GT to Telecom Malaysia, before they can finally conclude on a deal that will be favorable to the whole nation.

Addressing journalists in parliament yesterday, minority leader, Osei Kyei Mensah Bonsu stated that in 1996, when NDC sold 30% shares of GT to Telecom Malaysia, the transaction never came to parliament, nor was it subjected to public debate. As such, for the NDC to turn around and criticize the Vodafone deal, is just throwing dirt into the eyes of the general public.

According to him, the interpretations that the committee gave with respect to article 6.1.6, which states that "There shall not be any injunction or order that prohibits or restrains the sale of the sole shares by Government Of Ghana (GOG) to the purchaser in particular or general," is different from how the minority sees it.

He added that their interpretation of that article is that the transaction could not close if the sales shares of 70% were encumbered in any way at the time of the transaction." This is, therefore, a condition precedent to the signing of the agreement," he stressed.

The minority leader observed that the government can, therefore, not interpret it to mean that the courts of Ghana are barred from examining any matter relating to the transaction after it has been signed. Touching on the indemnity clause, the minority said the report created the impression that the government cannot prosecute anyone who might have committed an offence involving GT/ Vodafone.

He contended that the sale and purchase agreement was done entirely within the laws of Ghana which run contrary to the assertion of the committee that the agreement went against many laws of Ghana, including the 1992 constitution, the NCA Act and Regulation and the Internal Revenue Act.

Mr. Kyei Mensah Bonsu, said the claim by the committee that the indemnity clause is not balanced as it seeks to protect the interest of the buyer and not the mutual interest of both parties is not conclusive. He argued that the nature of indemnity clause in the agreement is standard in such agreements; as such the committee should have given an indication as to which items the government should have sought indemnity on.

The minority, however, debunked the Committee's assertion that Vodafone PLC and Vodafone International BV were not the same company that the government of Ghana dealt with during the sale and purchase transaction between the two entities. He said Parliament in the discharge of its duties acted diligently in the said transaction adding "we were satisfied that Vodafone BV is a 100% owned subsidiary of Vodafone PLC".

The minority also disagreed with the Ministerial committee's valuation of GT which concluded that the sale price was low because the transaction adviser had put a higher value of the GT's assets and that Telecom SA offered a higher amount of $947 for 67% shares of the said contract.

"We disagree on this conclusion of the value of GT. The transaction Advisor had put a value of $769 and added a negotiable 40% goodwill, taking value to a negotiable amount of $1,075 billion," noted the Minority Leader. He explained that the Transaction Advisors themselves, after superintending the tender process yielded the highest tender of $520 million from France Telecom.

The Minority Leader debunked claims by the committee of Executive interference with the former President John Agyekum Kufuor being the one who agreed on the transaction price which was irregular. "We find this conclusion very strange, preposterous, and absurd it is important to state categorically that President Kufuor did not solely decide on the price, on his own technical and legal assumptions."

He said the opposition was glad when they heard of the news that that the British Serious Fraud Office may be interested in investigating the Vodafone GT transaction. "We welcome it wholeheartedly," the Minority Leader added.

Meanwhile, an investment lawyer, Nana Asante Bediatuo on Peace Fm yesterday noted that re-engagement of the Vodafone Plc concerning the 70 percent stake in GT cannot hold unless Vodafone Plc opens its arms for re-negotiations.

According to him, since the sale and purchase Agreement of GT was ratified by Parliament and paid for by Vodafone, the Government cannot order for re-engagement or negotiations into the whole transaction.

"A contract is a contract, and once you do a contract of this nature, you cannot go back over it. So, on contractual basis, if Vodafone comes out to say that they are not ready for negotiations, there is nothing you can do about it," he noted.

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