C'tee to look into Vodafone sale inaugurated

Frontpage; May 19, 2009
Story: Emmanuel Adu-Gyamerah
THE Minister of Communications, Mr Haruna Iddrisu, yesterday inaugurated a five-member inter-ministerial review committee to look into the Sale and Purchase Agreement (SPA) between the government and Vodafone International Holdings BV.
The transaction, which was entered into by the previous administration, enabled Vodafone to purchase 70 per cent shares of Ghana Telecom, with the remaining 30 per cent being retained by the government.
The setting up of the administrative review committee is in fulfilment of the National Democratic Congress (NDC) manifesto pledge to review the agreement and take a decision that will be in the strategic interest of the country.
The five-member committee is under the chairmanship of Mr Justice Emmanuel Addo, a retired international Appeal Court judge.
Other members of the committee are Mrs Ama Banful, a Chief State Attorney, representing the Attorney-General’s Department; Mr Benjamin Cudjoe, an Assistant Auditor-General, representing the Auditor-General; Mr Opoku Gyamfi Boateng, a financial consultant and representative of the Ministry of Finance and Economic Planning, and Mr Issah Yahaya, a representative of the Ministry of Communications, who is a member/secretary.
There are also four persons to provide technical support for the committee.
They are Dr Ben Adu, a communications consultant; Dr Raymond Atuguba, a legal practitioner; Mr Michel Bow-Amuah, a network consultant, and Ms Rita Sraha, a financial expert.
In his remarks, Mr Iddrisu stressed that the committee had no mandate to review the decision of Parliament but it would peruse the contents of the transaction for recommendations to be made to the House.
He recalled that the Ghanaian public and political parties in the opposition at the time of the agreement raised critical questions on the transaction.
“We need to find answers to these questions,” he said, and gave the assurance that the review was “being done in good faith and to assuage the concerns of the Ghanaian public”.
The committee, which has three months to present its report, will work under a 15-point term of reference.
It is to look into the justification and rationale of the indemnity clause in the agreement, its possible removal, as well as the value for money and financial implications for the government of the cash-free, debt-free basis of the transaction.
In addition, the committee will also seek answers for the huge liabilities of Ghana Telecom prior to the sale and why some of the liabilities were not declared at the close of the deal.
It will also examine the tenure of Telenor/Telecom Management Partnership (TMP) and also the three-member Interim Management Team of GT with the GT contract with Alcatel and how the $228 million loan and the $63 million escrow account was managed and disbursed.
The review will also examine the possibility of de-coupling the Ghana Telecom University College from the transaction to be spun off into a fully fledged ICT institute of excellence and the justification for the inclusion of the national fibre-optic backbone infrastructure in the GT transaction when it was conceived as a stand-alone, open-access, non-discriminatory project to support the development of ICT in the country.
Again, the composition and registration details of the 70 per cent shares and whether or not the government was dealing with Vodafone UK P/c or Vodafone International BV will also be examined, in addition to the status of and the repayment of the $30 million loan from China Eximbank for the implementation of the first phase of the national fibre optic backbone and its implications on future financing of ICT projects.
Other terms of reference for the committee include the examination of issues relating to the suspension/termination of contract with the transaction advisor and determining whether there were better offers from potential bidders that were received and ignored.
It will also examine the exemptions regime under the SPA in relation to offers of 3G licences, determine the extent to which Vodafone had injected working capital into GT, which was the basis for the sale, the implementation of employee restructuring and labour rationalisation and the absence of safeguards for the minority shareholder in the SPA, especially requiring agreement on issues such as the change of name and headquarters of GT.
In his remarks, Mr Justice Addo thanked the government for the confidence reposed in them and gave the assurance that the committee would discharge its duties to the best of the abilities of its members.
“We will say it as it is to enable the government to take its own decision,” he said.