radio myghana tv

Gang of three MPs sue GNPC

Three Minority Members of Parliament have filed a suit against the Ghana National Petroleum Corporation (GNPC) in a bid to stop its acquisition of a $700 million dollar facility loan.

Dr. A Akoto Osei, MP for Old Tafo, Dr. Mathew Opoku Prempeh, MP for Manhyia South and Samuel Atta Akyea MP for Abuakwa South are praying the court to place an interlocutory injunction on the loan acquisition.

A motion filed by Nana Bediatuo Asante, counsel for the plaintiffs on November 25, 2014 is demanding four reliefs.

“A perpetual injunction restraining the Defendant whether by itself, contractors, workmen, agents, assigns, privies, servants and whomsoever of whatever description claiming through Defendant from contracting, securing, procuring or drawing down on a loan facility of USD 700 million or any other loan from any financial institution whether situate in Ghana or not or embarking on any project, works and programmes without prior parliamentary scrutiny and approval.”

They are also seeking a declaration that the GNPC contracting, procuring, securing or otherwise acquiring or drawing down on the loan facility or any other loan without prior approval of Parliament is unconstitutional, unlawful, null and void.

The plaintiffs want the court to uphold that the defendant's decision to undertake a programme of projects without parliamentary approval would be against the letter of the Petroleum Revenue Management Act 2011 (Act 815) and would therefore be null and void.

Both government and GNPC have argued in defence of the latter. According to the GNPC, all it requires for a $700 million loan is approval of the Finance Minister.

But some Minority MPs suspect the government is riding on the back of the GNPC to secure loans for its projects, prompting the three MPs to go to court to insist that the deal goes through Parliament.

Find below the motion
1.    Honourable Dr A Akoto Osei
A8 Manet Cottage
DTD Spintex Road
2.    Honourable Dr Mathew Opoku Prempeh
Yasmine Place, Trasacco Valley.
Adjirikanor. Adenta Municipality.                      

3.    Honourable Samuel Atta Akyea
241 A SSNIT Greda Estate
7th Avenue
Teshie Nungua
Ghana National Petroleum Corporation    
Petroleum House    
Community One
1.    1st Plaintiff is a citizen of Ghana and the Member of Parliament for Tafo Pankrono Constituency in the Ashanti Region of Ghana.

2.    2nd Plaintiff is a citizen of Ghana and the Member of Parliament Manhyia South Constituency in the Ashanti Region of the Republic of Ghana.

3.    3rd Plaintiff is a citizen of Ghana and a Member of Parliament for Abuakwa South Constituency in the Eastern Region of the Republic of Ghana.

4.    Defendant is a statutory corporation established to engage in the exploration, production and disposal of petroleum products and, in the name and stead of the Republic to hold interests in the petroleum sector.

5.    Plaintiffs say that as Members of Parliament they have each sworn a duty to uphold the Constitution of the Republic of Ghana, the rule of law and laws made by Parliament as well as the dignity and effectiveness of Parliament.

6.    Plaintiffs say that on November 10, 2014 the Statesman Newspaper reported that the Defendant was set to contract a loan of USD 1200 million to be repaid in five years and secured by oil belonging to the people of Ghana.

7.    Plaintiffs say that on Tuesday November 11, 2014, published Defendant's reaction to the media stories in respect of the alleged speculated loan facility.

8.    Plaintiffs say further that in the Defendant's public statement referred to in paragraph 7 above, the Defendant confirmed that the Defendant was acquiring a USD 700 million facility at an interest rate calculated per three month LIBOR plus 3.9% for a five-year term (hereinafter, the “Loan Facility”).

9.    Plaintiffs say that Defendant is to execute the Loan Facility agreement on or about November 20, 2014 with the draw-down of USD 350 million of the Loan Facility on November 25, 2014.

10.    Plaintiffs say that Defendant  has stated the use of the proceeds of the Loan Facility variously as the following:

i.    To augment its working capital, including oil and gas trading working capital needs;

ii.    To build up capital since state capitalization for its operations ends 15 years from the commencement of Petroleum Revenue Management Act in 2011;

iii.    To ensure lower gas price to Ghanaian consumers and for cheaper electricity; and

iv.     To secure a low interest facility at 4.43% for a 5 year tenure. This is better than the 22% interest which the state would pay on the OCTP project ($493 million) or the 15% interest which the state will pay on the TEN Field Gas project (US$36 million) if the investors were to pre-finance the projects.

11.    Plaintiffs say further that according to the Defendant, the facility is expected to finance the following projects (hereinafter, the “Projects”):

i.    Provide guarantees for the Offshore Cape Three Points (OCTP) contractors for the off-take of natural gas from the field.

ii.    Raise a bank guarantee of about $200 to US$300 million.

iii.    An immediate requirement of US$105 million to pay part of natural gas price negotiated with the OCTP partners.  

iv.    Paying for the pipeline and receiving facility in the OCTP (Sankofa-GyeNyame field) gas development project expected to cost $493 million.

v.    To pay $36 million, being 40 per cent of the pipeline cost to connect TEN gas to the Jubilee FPSO.

vi.    Investing $54million to increase its stake in the Deepwater Tano Cape Three Points block in which together with Hess it had made seven discoveries.

12.    Plaintiffs say, and will contend, that the Projects have not been approved by Parliament as part of Defendant's annual program of works in the manner stated and contemplated by Respondent in the myjoyonline interview which approval is a statutory requirement pursuant to Section 7 (3)(b) of the Petroleum Revenue Management Act (Act 815) (hereinafter, “Act 815”). Plaintiffs will further contend that Defendant cannot spend or borrow to spend on projects outside of its approved program of works.

13.    Plaintiffs will further contend that Defendant purporting to engage in unapproved projects would constitute an illegality and unlawful conduct.

14.    Furthermore, Plaintiffs will contend that the Defendant is not authorized by law to spend or borrow to spend without parliamentary approval of the Projects and same would constitute an illegality.

15.    Plaintiffs say that although Defendant intends to draw-down on the Loan Facility on or about November 25, 2014, the relevant agreement in connection therewith has neither been scrutinized by Parliament nor same approved by Parliament in accordance with Article 181 (3) and 181(4) of the Constitution of Ghana, Section 7 of the Loans Act 1970 (Act 335) and Section 7(3)(b) of Act 815.

16.    Plaintiffs say that Defendant has stated publicly that Defendant does not require parliamentary approval to contract loans in the nature of the Loan Facility.

17.    Plaintiffs say that Defendant is relying on the Ghana National Petroleum Law, 1983 (PNDCL 64), Section 15 thereof, to assert that it does not require parliamentary approval in order to contract loans in the nature of the Loan Facility. Defendant asserts that it is only required to seek the approval of the Minister of Finance upon the recommendation of the Minister of Energy and Petroleum which it has done. Defendant also states that the Defendant has secured the legal opinion of the Attorney-General and Minister of Justice which endorses the view that parliamentary approval of the Loan Facility is not required.

18.    Plaintiffs will contend that in the face of the requirements of Articles 181(3) and 181(4) of the Constitution of Ghana, 1992 as well as Section 7(3)(b) of Act 815, and Defendant being a public institution or authority whose programmes and activities statutorily require parliamentary approval, it is legally and constitutionally untenable for Defendant to avoid parliamentary scrutiny and approval.

19.    Plaintiffs say that Defendant is a statutory corporation entirely capitalized by the Republic, its funds are public funds within the meaning and intendment of Article 175 of the Constitution of Ghana and cannot enter into loan agreements or contract the Loan Facility without the knowledge and consent of the people's representatives in Parliament especially when state assets ultimately belonging to the Republic are to be used to secure the Loan Facility.

20.    Plaintiffs say that Defendant's debt financing of its capital operations without parliamentary oversight carries significant risks including pre-mature entry into major industry programmes, thereby exposing the Republic to significant credit risk given the size of the Republic's financial and oil reserves, as well as the many unsuccessful efforts at exploration.

21.    Plaintiffs will contend that the Loan Facility is itself wholly unnecessary given the adequate funding provided to the Defendant which has resulted in surpluses of its revenue allocations over the last two years. Indeed, in the 2012 allocation of revenue pursuant to Act 815, the Minister of Finance, allocated thirty percent (30%) of the Republic's net carried and participating share of petroleum revenues to Defendant instead of the forty percent (40%) allocated to it in 2011.

22.    Plaintiffs say, in furtherance of paragraph 19 above, that though the Minister of Finance argued that higher revenues in 2012 meant thirty percent (30%) of the receipts resulted in more revenue for the Defendant, the fact remains that the Minister could have given Defendant the maximum fifty-five percent (55%) pursuant to Act 815 if he deemed such a requirement tenable in the face of Defendant's needs.

23.    Plaintiffs say that the Defendant already has a scheme in place which ensures that it's programs for development and production, which are included in the Projects, are funded by its oil development partners (hereinafter the “Partners”) without Defendant even having to raise any significant amounts of cash. Defendant's share of the costs associated with such financing is repaid out of its share of oil sale proceeds.

24.    In furtherance of paragraph 23 above, Plaintiffs will contend that the revenue sharing scheme under Act 815 provides another funding source for the Defendant's activities. Defendant's equity financing needs, which are determined with reference to the work program of the Partners, are funded from the Act 815 revenue sharing scheme.

25.    Plaintiffs will contend further that the existing model of Defendant's engagement with the Partners and in oil development activities where the Partners “carry” Defendant from exploration through development to production and Defendant pays for its share of costs pursuant to an agreed post-production payment plan has been very successful. Indeed, there has been no default of Defendants obligations to date.

26.    Plaintiffs say that all of Defendant's financing and spending to date has been done within parliament-approved programs and budgets and will contend that any significant departure form same, such as contracting the Loan Facility and undertaking the Projects, must have the approval and consent of Parliament especially where disbursements made to Defendant under Act 815 are intended to provide security for the Loan Facility.

27.    Plaintiffs will also say, for example, that while section 1 of the Petroleum (Exploration and Production) Law (PNDC Law 84) does not require parliamentary approval in accordance with its terms, since the coming into force of the 1992 Constitution all petroleum agreements executed by the Defendant have been subjected to Parliamentary approval, consistent with Article 268(1).

28.    Plaintiff will further contend that Parliamentary debate of the terms of the Loan Facility as well as the parties thereto and the value for money scrutiny of the Projects is fully consistent with the obligations of the Defendant, as a Trustee, to engage in transparent management of trust assets with the full knowledge of the beneficiaries. In this case, the representatives of the Republic in Parliament.

29.    Plaintiffs will also contend that the Minister of Finance has absolutely no power or authority to approve the acquisition of loans by the Defendant or indeed any other public institution save where same has been delegated by the Parliament of Ghana which, Plaintiffs contend, is not the case with respect to the Loan Facility.

30.    Plaintiffs say that Defendant's share of revenue from the Petroleum Holding Fund has been reviewed downwards from 40% to 30% for the next 3 years. However, the Loan Facility, according to the Defendant, is for a five-year term and repayment starts as soon as disbursements are made with no grace period. The obvious untenable risk is that Defendant, without a legal mandate, will tie Parliament's decision making authority when disbursement to Defendant of a portion of the Republic's oil production revenue is up for review in three years' time. This will be unlawful usurpation of parliamentary authority.

31.    Further to paragraph 30 above, the Loan Facility 5 year pre-payment plan effectively and impermissibly mortgages the Republic's share of oil production revenue until 2019 in view of the fact that the commodity is being used both for repayment and as collateral. Defendant would have unlawfully predetermined how Parliament must use the bulk of Ghana's oil revenue from now until 2019.

32.    Defendant, in the myjoyonline interview, stated that Defendant will be using its share of the oil revenue as provided for by Act 815 to secure the loan. Plaintiffs will contend, however, that this is misleading and a misconception of the true legal position. Plaintiffs say that all revenue due from the direct and indirect participation of the Republic is what may be ceded to “a national oil company” pursuant to Section 7(3) of Act 815 and will contend that Defendant has no automatic or binding right to any share of revenue from petroleum operations.

33.    Again, further to paragraph 30 above, it is untenable, unreasonable and unlawful for the Defendant to purport to mortgage any portion of the Republic's share of revenue from petroleum operations without Parliamentary scrutiny and approval.

34.    Plaintiffs say that Defendant has given conflicting and irreconcilable reasons for the need to acquire the loan. In paragraphs 8 and 9 hereof Plaintiffs have set out the reasons proffered by the Defendant in the myjoyonline interview. However, in Defendant's Request for Quotations (“RFQ's”) addressed to banks and crude oil traders in connection with the borrowing, Defendant states the use of proceeds as “to purchase various assets including Government of Ghana assets and to finance the cash calls related to GNPC's equity financing costs and oil & gas infrastructure investments”.

35.    Further to the preceding paragraph, Plaintiffs say that the Defendant has in documents relating to the borrowing, indicated that Government is the real beneficiary of the borrowing and not the Defendant.

36.    Plaintiffs will contend, in view of paragraphs 34 and 35 above, that it is crucial that Parliament scrutinizes and approves the Loan Facility, especially in view of the conflicting and inconsistent reasons, both public and private, proffered by Defendant to justify the Loan Facility.

37.    Given that all revenue from direct and indirect participation of the Republic in petroleum operations belongs exclusively to the Republic, Plaintiffs will contend that none other than the Republic, which invariably includes Parliament, can mortgage those receipts for a Loan Facility.

38.    Plaintiffs will further contend that Defendant is acting merely as the alter ego of Government for the purpose of acquiring the Loan Facility since the Defendant does not have the authority to bind oil revenues in the manner stated by Defendant.

39.    Plaintiffs say that while Defendant may use any portion of the oil revenue actually disbursed to it for its Parliament-approved programmes it cannot purport to utilize oil revenue which has not been disbursed to it either as a guarantee, security, collateral, or any otherwise legitimate forward-looking purpose, without the consent and approval of the Republic nor indeed under the authority of Government.

40.    Plaintiffs will again contend that in view of Paragraphs 34 and 35 above, again, Defendant is merely acting as a vehicle for Government to acquire loans without Parliamentary approval.

41.    The Defendant's reliance on PNDC Law 64 and 84 is misconceived because even though those laws remain effective, to the extent that any of their provisions are in conflict with constitutional requirement and indeed Acts of Parliament passed subsequent thereto, same must be read to conform with the Constitution. In any event Section 15(2) of PNDC Law 64 obligates Respondent to obtain parliamentary approval for any borrowing.

42.    Plaintiffs say that Defendant is established by an Act of Parliament, its budget, including administrative expenses and programmes are approved by Parliament, Defendant's funding is restricted by an Act of Parliament out of discrete funds owned by the Republic exclusively. All such incidents of establishment and funding in present circumstances make Defendant an alter-ego of Government. It is untenable to say that it is autonomous and does not require Parliamentary approval for debt financing or contracting loans in these exceptional circumstances.

43.    Finally, Plaintiffs say that the arguments and reasons being proffered by the Defendant to justify its attempt to avoid parliamentary scrutiny and approval rather exposes Defendant as merely the alter-ego of Government that is being used to surreptitiously acquire loans on the blind side of Parliament and unless this honourable Court intervenes Defendant will continue to perpetuate this violation of due process of law, clear illegality, affront to Parliament, and unconstitutional conduct.

44.    WHEREFORE Plaintiffs claim against the Defendant the following:

a.    A declaration that Defendant contracting, procuring, securing or otherwise acquiring or drawing down on the Loan Facility or any other loan without prior approval of Parliament is unconstitutional, unlawful, null and void.

b.    A declaration that Defendant's decision to undertake a programme of projects without parliamentary approval is ultra vires the Petroleum Revenue Management Act 2011 (Act 815) and is therefore null and void.

c.    A perpetual injunction restraining the Defendant whether by itself, contractors, workmen, agents, assigns, privies, servants and whomsoever of whatever description claiming through Defendant from contracting, securing, procuring or drawing down on a loan facility of USD 700 million or any other loan from any financial institution whether situate in Ghana or not or embarking on any project, works and programmes without prior parliamentary scrutiny and approval.

d.    Any other order(s) that this honourable court deems fit.


                                                                                       LAWYERS FOR PLAINTIFFS

                                                                                       (Faibille & Faibille)

                                                                                 2nd Floor

                                                                                       Dan Morton Tailors Building

                                                                                 (Behind Trust Towers)

                                                                                       Asylum Down


  Story by Ghana || Isaac Essel | This e-mail address is being protected from spambots. You need JavaScript enabled to view it | twitter @isaacessel

This article has 0 comment, leave your comment.

Browse Online Radio

  • (KA) Kristo Abusua Radio
  • 1 Power FM
  • AA Divine Radio UK
  • Abena Radio
  • Abrantie Gospel Radio
  • Act FM Radio
  • Adehye Radio France
  • Adepa Radio US
  • Adom 106.3 FM
  • Afrikka Radio
  • Afro Radio
  • Ahenfie Radio
  • Ahomka 99.5FM Elmina
  • Akwaaba Radio
  • AliveGhana
  • All Friends Radio
  • All Prayer Channel
  • Angel 96.1 FM
  • Anidasoo Radio
  • Apostolic Radio [AFRICA]
  • Aseda Radio
  • Asempa 94.7FM
  • BOH Radio Thunder
  • Christian Radio UK
  • Citi FM
  • Club Hiplife
  • Compassion Radio Spain
  • Deliverance Radio UK
  • Dinpa FM
  • Easy FM
  • Echoes of Life
  • Edikanfo Radio Hamburg
  • Evang. Bright Radio
  • Faith Radio UK
  • FLCC Radio UK
  • Fox 97.9FM
  • GaDangme Radio
  • Genesis Radio
  • GFM Radio
  • Ghana Beats
  • Ghana Today
  • Ghana Waves
  • GHRadio 1
  • God Is Able Radio
  • Gospel Radio
  • Gye Nyame Radio
  • Happy FM
  • Heart of Praise Radio
  • Highlife Radio
  • Hitz 103.7FM
  • Holy Hills Radio
  • Hope Radio UK
  • Hot 93.9 FM Accra
  • Hot Digital Online
  • Hot Digital Radio
  • Joy 99.7 FM
  • Kessben FM

  • Kingdom Radio Stuttgart
  • Kings Way Radio
  • Light 94.9 FM
  • Living Word Radio
  • Love and Peace Radio
  • Luv 99.5FM
  • Maakora Radio
  • Melody 91.1FM
  • Mexx Radio
  • Mighty FM
  • Mighty God Radio
  • Miracle Prayer Line
  • Morning Star Radio
  • MyGhanaRadio
  • MyGod Radio
  • Naspa Radio
  • New Mercury 91.5 FM
  • Nhyira 104.5FM
  • Obimanso Radio
  • Octopus Radio
  • Okwahuman radio
  • Peace 104.3 FM
  • Pentecost Radio
  • Pilgrim Ministries Radio
  • Power of Powers
  • Praises Radio
  • Precious Star Radio
  • Radio El-Gibbor UK
  • Radio Focus
  • Radio Gold
  • Radiolivin
  • Rainbow Radio
  • Recogin Radio
  • Reforrmed Radio
  • Rescue radio
  • Revival Channel
  • Rhema Radio
  • Roakus FM
  • Safari Radio UK
  • Sahara Radio
  • Sankofa FM - Stuttgart
  • Sankofa Radio
  • Sikaradio
  • Souls Radio
  • Stareloh Radio
  • Sunlight Radio America
  • Swiss Root Radio
  • TopAfric Radio
  • Trinity Radio Toronto
  • Trinity Radio USA
  • UN!TY Fm
  • Voice of Africa
  • Wayoosi Radio
  • Word Radio
  • X 95.1FM Ghana
  • Y FM
  • Zango FM

Ghana News

No tweets found.