Vodafone Report-Don’t hang yourself with it, Mr President

The Vodafone Report that the NDC followers are beating their chest, in anticipation to hang the last government on; will prove to be the noose that ends it for Mills administration, if he doesn’t drop it in the Bin or bury it.

There is nothing in that report that will stand up in any competent Court of Law, if the sitting Judges are well versed in Constitutional Laws and not stooges of the NDC government. The Report is full of innuendoes, baseless allegations and has the potential to precipitate Constitutional crisis. The Committee was out of its depth in questioning the right of a President of the Republic of Ghana to lead an international negotiation with serious economic implication for the Nation in terms of jobs, structural development of National Communication Networks, inward flow of investment with positive impact on National Income and much needed increase in the nation’s capacity to finance some other economic projects. Indeed, Mr Haruna Iddrisu, the Communication Minister, showed a commendable understanding of the situation more than most of his colleagues, with his sharp rebuke of the Committee for dabbling in matters outside their remit.

The Committee’s Report is not a result of a thorough investigation as they give the impression. The Report is based on a supposedly study of a Commercial deal between the Government of Ghana led by Mr Kuffour, the ex-President on behalf of Ghana Telecommunications Company (GT) and a Global Company, Vodafone Plc. They also examined the management and finances of GT prior to the Sales and Purchases Agreement (SPA). The Committees limitations included a lack of objectivity; lack of technical knowledge to appreciate the available study materials; insufficient study materials because key players refused to cooperate; short time frame to conduct a thorough study because of Political expediency; and above all the need to fit preconceived ideas to the NDC political agenda. The result is a botched study work with no serious benefit for the proper functioning of Ghana’s democratic institutions.

The Committee overstepped its mark and broaden its comments to include matters that were irrelevant to its stated objective. The hurriedly compiled Report dwelt on issues outside its Remit. The Report produced nothing that bears resemblance to the facts on the ground. It could not explain adequately the basis for the absurd figure of less than $267m as the effective Consideration for GT assets. It unjustifiable raised questions about the integrity and right of Ghana’s ex-President, Mr Kuffour, to take a pivotal role in international negotiations that had huge economic implication for the nation. It made a mockery of parliamentary authority as a source of the President’s power to ratify important commercial dealings for the nation. In essence, the committee challenged the authority of the President of the Republic of Ghana to govern with Parliamentary majority. Along the way the Committee lost its bearing and became too big for its own shoes!

The discussion about the legal position of the Vodafone takeover with respect to a sitting MP’s `testimony’ was a waste of space and a political gimmick. If a sitting MP’s allegation is not within a Committee’s remit to investigate, why should it become their objective to state the legal options based on suppositions? Such comments were designed to beef up the report and give the impression that some hours of work had gone into the production of the Report. It is also a ruse to give impetus to the smear campaign against NPP majority members of the last Parliament. It is diabolical and lack objectivity!

The ex-President, Mr JA Kuffour, was unjustly accused of wrestling the negotiation from technocrats; and of single-handedly arriving at a deal with Vodafone. The Committee described the Deal as shrouded in secrecy! Nothing could be farther from the truth! Vodafone deal was debated in Parliament and even around towns and villages in Ghana, with radio, newspapers and television stations taking a leading role. Ironically, the Vodafone deal was more openly conducted than any national asset-sale transaction in the history of Ghana. The Committee had the audacity to accuse the Former President of a breach of constitution! And went on to claim several laws had been broken in the process of reaching a deal with Vodafone. Significantly, the Committee only cited in vague terms a few areas of the law that in their opinion had been broken.

They referred to 1992 Constitution but did not state specifically which area had been breached by the SPA. Let me remind the Committee of the executive power of the President under the constitution in respect of International Agreements. Article 75 clause (1) states that the President may execute or cause to be executed treaties, AGREEMENTS or conventions in the name of Ghana. Clause (2) states that an Agreement executed by or under the authority of the President shall be subject to ratification by (a) Act of Parliament; or (b) A resolution of Parliament supported by the votes of more than 50% of all the members of Parliament.

The President of Ghana has the power vested in him by the constitution to use any of the two constitutional instruments to ratify an international agreement. And that is exactly what Mr Kuffour did with respect to the Vodafone Deal! So, the question about conflict between two constitutional instruments does not even come into play for the committee to suggest the Agreement was unconstitutional. The Committee questioned the terms of the Contract in relation to Anti-corruption warranties for the GT Group directors.

Again I will refer them to the ‘92 Constitution Article 72 clause 1(d), which states that the President may, acting in consultation with the Council of State, remit the whole or part of a punishment imposed on a person or of a penalty or forfeiture otherwise due to Government on account of ANY offence. If the executive have the power to give remission from punishment for ANY offence, is it not a matter of common sense rooted in common law that the President can take it to its logical end; and close an important economic deal for the nation by waiving potential punishment? Moreover, it was a Constitutional instrument that was used to waive the potential punishment under the Agreement! So how does that oust or exclude the Court’s jurisdiction in this matter? The Court’s power to adjudicate on this issue does not change an iota! The Court will be able tell the Committee that the President is within his right to waive the potential punishment if they seek clarification in the Supreme Court. And that Judgement from the Supreme Court would stamp the Court’s jurisdiction on the issue! The indemnity clause in the SPA is consistent with the law and the spirit of it.

The Committee protested about the statutory instrument underpinning the indemnity clause in the SPA. Is this protest a challenge to the right of the legislature to amend the law? Does the Committee now place itself above Parliament as the legislative authority in Ghana, with the right to dictate how business should be conducted in the Parliamentary chamber? Or does it see itself as the Supreme Court to interpret Constitutional matters? The sheer arrogance displayed by the Committee and the total disrespect shown to the Executive, in particular the ex-President, Mr Kuffour, alone should be a good reason to bury the Report deep, where it would never receive sun light.

In any case, under the Constitution, the President of the Republic of Ghana in his capacity as head of Government cannot be challenged legally for using constitutional instrument to conduct the affairs of the State (Article57 clause 4). The only time a legal challenge can be mounted against the President is, when the business is of a personal nature or private, and therefore not in the line of duty as head of State (clause 6). There is no law in Ghana that bars the President from taking a pivotal role in international Commercial Agreement involving the State. So, what is the Committee hoping to achieve with this nonsensical commentary about executive interference in the Sale of GT?

Kuffour’s `crime’ in the eyes of the Committee was lending his weight to the negotiation! He led the negotiation! He did not exclude those with the technical knowledge in the relevant field of the negotiations. The key word is LED! Leading a team of negotiators doesn’t mean having them around you 24 hours of the day, even when the occasion doesn’t demand it. International negotiations require tact, skill and personal charm and sometimes this means negotiators sharing informal moments together, without the camera. To suggest the negotiations led by the former President were highly irregular and unconventional is to show ignorance of the highest magnitude at the way international negotiations are normally conducted.

Many heads of Governments’ behind-the-scene dealings with their counterparts in International negotiations are not the subject of Investigative Committees; so nobody learns about meetings without minutes, informal conversations about the subject matter of the negotiations. Hence, those deals are judged as transparent. In contrast, Ghana has a government bent on digging dirt where there is none, and is relentlessly looking for fault with the previous administration. As a result, this vindictive government has set up investigative committees to look into the legitimate actions of Kuffour-in-government, including discussions over dinner with Vodafone representatives. So it is not surprising that the Vodafone transaction seem opaque to the Committee and they are playing the devil’s advocate by raising ethical issues about the ex-President’s negotiating tactics.

If one strips off the unnecessary investigative committees from the equation, one will conclude that most major international players’ tactics, in international negotiations is not different at all from that of Mr Kuffour. To the season observer, there is nothing unusual about chief international negotiators sharing private moments with their counterparts and having informal conversations before the formal negotiation kicks off.

At the end of the day the Vodafone deal was debated and approved by Parliament. The deal was then signed, sealed and delivered by all the relevant participants with the guidance of the experts in the relevant fields. It was done in broad day light and not in a backward garden with only the former President in section. Vodafone deal’s legitimacy comes direct from Parliament with the aid of a constitutional instrument permitted under existing law for such international Agreements; so it is absurd for the Committee to challenge its legality on procedural grounds.

The President’s right to conduct National issues the way he sees fit using parliamentary majority is mandated by the Ghanaian electorate and vested in him by the constitution. So nobody should doubt Mr Kuffour’s constitutional right to be heavily involved in serious international Agreement that had huge economic implication for the nation!

It is nonsensical for the Committee to describe the transaction as not offering Value for Money, when there is nothing in that report to measure the value they are alluding to. In the same vein, they referred to the SPA terms and conditions as inimical to Ghana’s interest through jaundiced eyes. Who determines Ghana’s interest? Is it the Executive or a Committee of stooges? Ghana’s interest, from the Committee’s view point, is only measured by what Ghana is giving up; but not what Ghana is gaining given the circumstances. It is so ambiguous and lacks objectivity to the extent that it renders the Report suspicious. Price is not the only determinant for Value, and this is what the Committee failed to appreciate. It is common knowledge in business circles, how some competitor bidders for Contract, quote unrealistic prices; and when faced with reality they fail to deliver. One has to be smart to sort the wheat from the chaff in such matters to ensure the continuity of business operations.

The gentle giant, Mr Kuffour, gets the full marks for taking into consideration business track record, corporate history, speed of delivery, after sales service, reliability, durability, capital structure of the bidding companies, the gearing size and other aspects on offer from the bidders besides price. He made a very smart move by choosing Vodafone, a major player in the industry, which has now turned GT around in terms of profitability, job security and the extension of the Company’s commercial life. Kuffour should be thanked for his business acumen instead of the diabolical innuendoes being spread by the rumour mills of the NDC spin-machinery.

The Committee exhausted the point about the National Fibre Optic (NFO) as a strategic national asset that should be decoupled from the SPA. Did they stop to think that the NFO, as part of the sales package, served as a huge attraction for a giant in the industry? And that Ghana wasn’t looking for pygmies in the industry to spell the death knell for GT? Has the Committee reflected that even after the takeover, the NFO asset remains a structural part of Ghana’s Technological Development; for the simple reason that the asset cannot be physically carried away from Ghana? What then is the big deal about ownership transfer, when the bottom line is that the Asset remains a piece of Ghana’s economic and technological infrastructure? Would they rather scupper a rescue package for an ailing GT company, and allow an asset, which Ghana lacked the expertise to develop, to rot and waste away? If the Committee had reflected over these questions they would probably have backed away from making a mountain out of a mole hill. But, sadly the Committee had a different task of fitting the facts to a predetermined political agenda. Hence, Objectivity was not a strong feature!

Another issue beyond the Committee’s comprehension was the internal workings of a Group Company with a foreign based Holding Company. The Committee showed unbelievable ignorance about the rights of a parent Company to control the business direction of its subsidiaries or associated companies. It expressed alarm over the Contractual Agreement with Vodafone UK plc instead of Vodafone International BV Netherland. If a group company uses its broad-based advantage to minimise the cost of acquisition, is this a good reason to scupper an important legally binding international agreement?

Which business organisation involved in international transactions will not be mindful of transfer charges and seek to lower its cost? How does a Group Company using Generally Accepted Accounting Conventions to minimise its input factors, breach the Internal Revenue Act 2000 (Act 592)? The reference to this Act is pure mudslinging by the Committee because they were very ambiguous about what specifically had been breached under this law by the Sales and Purchases Agreement (SPA). The Committee should understand that if the once failing GT organisation had a problem with the Inland Revenue, it is not a justification to hang that problem on the neck of the SPA. The GT prior to SPA is a separate `entity’ to GT Group after the Agreement! The SPA is the bridge between the two `entities’ and has to be judged on its own merit! The management and business conduct of GT prior to the sales Agreement is a separate issue to the SPA. The Committee had a duty to make that distinction to the public.

To suggest there is something wrong with a Group company legally minimising its input factors, when conducting business transactions, shows the poor knowledge these bunch of nonentities have about the operations of Global Companies. If Mills allow himself to be guided by this committee members hastily assembled to play politics with the economic life of the nation, Ghana will be poorer for it. It would be the height of folly for Mills to send a cowardly message to potential foreign investors, that the nation cannot be trusted to honour its international agreements because of vindictive politics.

The Committee indicated their concern about some complicated financial instruments used in the takeover bid. Again I say to them macho politics is no substitute for ignorance! The important thing here is that there exist a clear and legally binding contractual agreement between Vodafone UK and Ghana government GT. There is no doubt about the legal intention behind the Deal! There was an offer by Vodafone UK that was duly accepted by Ghana government acting on behalf of GT. The Consideration in terms of cash and other financial instruments were issued and accepted by the respective parties Vodafone and Government of Ghana GT.

GT was not bullied to give up its 70% shares to Vodafone UK Plc in exchange for the financial instruments, so what legal grounds is this committee standing on and screaming for renegotiation of the Contract that has been signed, sealed and delivered? Evidence of the historical figure of $900m payment for the 70% shares in GT by Vodafone was established in August 15, 2008 with the Bank of Ghana and the Accountant General’s Department; and it should exist for verification. It is, therefore, very misleading for the Committee to embark on some creative accounting and come up with the ridiculous figure of less than $267m as the ultimate price for the shares. The committee talk about Value for Money in abstract terms without indicating, substantively, reference points or measuring instruments. The basis for valuation of some of the assets they mention is not clear to the reader. The reader of the Report is expected to accept the Committee’s word as an axiom, because they (the Committee) presumably think the market price is determined by a wave of their magical hand. Well, they should think twice, if that is the case!

It would be a tragedy if Ghana fails to honour its part of the contract terms, because `Buga-Buga’ politicians are in control with their myopic Committee guiding them. A constitutional crisis will ensue if any second thought is giving to the Report, Mr President. The report must go straight into the bin where it belongs to avert such tragedy! Otherwise that Report will come back to haunt you in retirement, Mr Attah-Mills. The former President, Mr Kuffour’s deal with Vodafone was the best under the circumstances for the nation; and the gentle giant can sleep soundly that he has performed a good service for the nation.

Kwaku Frimpong