Government wants to sell ADB, NIB cheap - Adongo ‘blows alarm’

Member of Parliament for Bolgatanga Central, Isaac Adongo claims government is aiming at selling the ADB Bank and the National Investment Bank (NIB) through the Ghana Amalgamated Trust Limited (GAT) support package for solvent but undercapitalised indigenous banks.

In a lengthy piece released on Tuesday, the legislator said the government had also planned to take over “a significant stake in

Read full articlethree other banks namely Prudential Bank, Omni/Sahel Bank and Universal Merchant Bank (UMB)” in the next few weeks.

According to Mr. Adongo, “GAT is a complete scam, dubious arrangement and national tragedy knitted together by persons pretending to be interested in the wellbeing of Ghana but with a clear plan to get you and I to pay astronomically over the next five years so that Ken Ofori-Atta can take over these banks. The plan is simply that ‘let’s use state resources to clean up these banks in the name of a government support and take them over in five years’ time when they are healthier and ready to take off.”

His assertion is based on his checks at the Registrar General Department (RGD) which, according to him, suggests that the National Trust Holding Company (NTHC) was a nominee shareholder of GAT on behalf of the government.

In simple terms, NTHC, he argues, is owned by SSNIT, NIB and SIC Insurance.

He says: “Information at the Registrar General’s Department reveal that GAT was incorporated in December 17 2018 with the National Trust Holding Company Limited (NTHC) as a 100 per cent nominee shareholder on behalf of the government of Ghana. Interestingly, the NTHC is owned by the Social Security & National Insurance Trust (SSNIT) – 43.48%; the State Insurance Company (SIC) – 19.70%; the National Investment Bank (NIB) – 19.70%, the AccreCon Consulting – 12.39%; and the NTHC PF – 4.73%.

“Thus, how can GAT be a private sector initiative when even its nominee shareholder is a majority state-owned entity? Is the government and the Bank of Ghana Governor saying that the supposed private sector investors could not, on their own, incorporate a vehicle to take advantage of an opportunity but had to rely on the government to identify such an opportunity, establish a SPV and then hand it over to them through a dubious scheme to then use to supposedly salvage five banks, including two national banks? Obviously, GAT is a state-owned entity and as such, its debts must count fiscal costs to the state.”

Agongo insists “ADB should not be on the list of banks to be supported by GAT. This is because Government has already fully met the minimum capital requirement of ADB Bank.”

On the part of NIB, the financial analyst mentioned that the bank “has been resilient and consistently posted positive operating profits in the last three years. Its net profits or profits after tax have been negative in the last three years on account of excessive impairments of its loan books resulting significantly from Governments inability pay its exposures to NIB clients who have worked for Government. If Government were to pay its exposure today, NIB will immediately reverse the losses on its income surplus account and be able to recapitalise and improve liquidity.”

Below is the full statement: