Following the earlier suspension of the concession agreement by the government, the Millennium Development Authority (MiDA) commissioned an audit into allegations that there were “fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further due diligence.”
FTI, the firm commissioned by MiDA to look into the allegation, indicated that out of the $12.25 million raised as Demand Guarantees for the payment securities, only $1 million dollars (8%) was funded by an equity contribution by a PDS shareholder.
The rest of the $11.25 million, according to the FTI report, was paid using money paid by ECG customers.
“$7 million (57%) was funded by a loan that was advanced by Cal Bank to another PDS shareholder. This loan was repaid from operating cash flows generated by PDS after the transfer date. The balance of $4.25 million (35%) was also paid directly from operating cash flows generated by PDS after the transfer date,” the FTI report said.
The FTI finding suggests PDS did not have the required financial capacity to take over the estimated $20 billion total assets of the state-owned Electricity Company of Ghana (ECG), the power distributor for the country’s southern sector.
Although the controversial deal has since been terminated, the government has said that the allegations will still be probed.
“The probe if it does establish that this indeed has transpired I am sure will come with its own consequences,” Mr Oppong Nkrumah said Wednesday on Joy FM’s Top Story.
He added, “my understanding is that government intends to examine those parts of the FTI report, which are also in my understanding corroborated by a CID [Criminal Investigations Department] report that part of the premium may have been funded by receivables from ECG.”
He also revealed that the CID has been part of a Government of Ghana enquiry into some of the allegations in the FTI report.
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