Three citizens of Ghana have petitioned the Office of Special Prosecutor to investigate the Vice President, Dr. Mahmoud Bawumia in the botched Power Distribution Services (PDS) deal.
The Three, Issifu Seidu Kudus Gbeadese, Elikem Kotoko and Stephen Kwabena Attuh allege that the Vice President, Dr. Bawumia was cited as having chaired the meeting that varied the condition precedent requiring PDS to produce a Bank Guarantee to a lesser and less robust security, Insurance Guarantee. In their petition, it was contained that “In the wake of the controversies, a report by MiDA and IFC cited a meeting chaired by the Vice President, Dr. Mahmoud Bawumia, and attended by the Chief of Staff, the Minister of Finance and the Minister of Energy. MiDAand IFC asserted that it was at this meeting that the decision was reached to downgrade the required Bank Guarantee or LOC to an Insurance Guarantee”, the statement added.
According to them, the subsequent audit report by the Millennium Challenge Corporation and Millennium Development Authority (MiDA) revealed the use of about US$12.25 million to fund the acquisition of the Insurance Guarantee, out of which about $4.25 million was drawn from the accounts of the Electricity Company of Ghana (ECG). The withdrawal of the $4.25 million from ECG’s account was without authority. Since PDS secured the Insurance Guarantee fraudulently, any decision, action or order from PDS predicated on the wrongful takeover could at best be described, ab initio, as null and void and of no effect.
They also allege that the audit reports revealed that the supposed downgraded guarantee – the Insurance Guarantee, was underwritten by an individual whom, according to the company, Al Koot Insurance and Reinsurance, a Qatari Insurance Company, did not have the mandate to bind the company in such a transaction. Further checks revealed that the insurance guarantee which was subsequently tendered was fraudulently procured and therefore constituted a misrepresentation by the perpetrators of the dubious transaction.
In response to a letter written by ECG to PDS on or about the 28thof February, 2019, a day to the takeover, Al Koot indicated that pursuant to its constitution that guides its operations, they are not authorized to underwrite counter party trade risk and so could not be held liable for any subsequent loses to EGC and the Government of Ghana. Al Koot also asserted that Insurance Guarantee of the form which was fraudulently procured by PDS, using Al Koot as a front, is not one of the product lines of the company.
Following the downgrade and its associated transactions, theMillennium Challenge Corporation terminated the deal leading to the loss of US$190 million to the Government and people of Ghana. This loss and other loses to the taxpayer of Ghana in the wake of the PDS scandal, according to the Three, was triggered by the sole decision at the meeting chaired by Dr. Mahmoud Bawumia where the Bank Guarantee was changed for an Insurance Guarantee for PDS and demanded investigations in this regard.
The Three, indicated that their petition is grounded under section 3(1)(g) of the Office of Special Prosecutor Act, 2017 (Act 959) and demands, among others, the following:
“We request the Special Prosecutor to investigate the complicity or otherwise of the Vice President of the Republic of Ghana, H.E. Dr. Mahmoud Bawumia and the he played at the meeting he chaired, which authorized MiDA to accept the downgrade of the required Bank Guarantee to Insurance Guarantee per Conditions Precedents numbers 24 and 31 of the PDS agreement."
"We request the Special Prosecutor to investigate and unravel the circumstances leading to such a decision to vary the conditions precedent into conditions subsequent, which effectively led ECG to transfer the assets of ECG to PDS and in consequence, causing Ghana to lose the second tranche of the compact of MCC to the tune of $190 million."
"We request the special prosecutor to recover the about $4.25 million of the taxpayer’s money PDS sanctioned to be withdrawn from the ECG operating accounts to secure the fabricated Insurance Guarantee, at a time PDS did not have any legitimate right over the assets of ECG, and as a result PDS could not authorize for any such payments to be made out of the operating account of ECG."
"We request the office of the Special Prosecutor to undertake investigations into any related matter which led to the termination of the PDS deal and the cost to the taxpayers of Ghana.”
Attached is the full petition submitted to the OSP on Tuesday September 3rd, 2024.
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