FTI Consulting, a United States-based consulting firm commissioned by the Millennium Development Authority (MiDA) to investigate whether or not Power Distribution Services (PDS) Ltd duly won the contract to manage the assets of the Electricity Company of Ghana (ECG), has confirmed that insurance guarantees were, indeed, paid to back the PDS’s takeover of the assets and operations of the ECG.
A 32-page report submitted by FTI Consulting to MiDA, dated September 3, 2019 and signed by Pat Pericak and David Okhumal, both officials of the consulting firm, said: “We have not seen any documents that would suggest that, as of March 1, 2019, PDS, Cal Bank, Donewell and/or personnel from MiDA should have questioned the validity of the payment securities.”
“We further note that officials from Al Koot confirmed to K&L Gates, a law firm in Qatar, that the stamp applied on the Acknowledgement and Agreement page of the Payment Securities is that of Al Koot. They further confirmed that the signatures are those of Al Nouri and Fadi Danghouth, who are employees of Al Koot,” the report disclosed in response to claims by Al Koot that the staff who signed the insurance guarantee did not have the authority to do so.
However, the report also found out that “of the $12.25 million that was charged by Cal Bank to PDS as fees for raising the Payment Securities, only $1 million (8%) was funded by an equity contribution by a PDS shareholder; $7 million (57%) was funded by a loan that was advanced by Cal Bank to another PDS shareholder. This loan was repaid from operating cashflows generated by PDS after the transfer date”.
“The balance of $4.25 million (35%) was also paid directly from operating cashflows generated by PDS after the transfer date,” it said.
It said based on reviews of background documents, interviews conducted and independent investigative analysis performed to date, the Payment Securities that were presented by Cal Bank and PDS to MiDA on February 27, 2019, which were subsequently accepted by the Ministry of Finance and the ECG, were compliant with the recommendations contained in the Universal Rules for Demand Guarantees (URDG 758).
However, sources familiar with the investigations have told the Daily Graphic that the government and the board of MiDA have rejected the FTI report.
That, the sources said, was because investigations conducted by the American and the Ghanaian sides of the power compact had […]