Gov’t suspends Agyapa IPO as Special Prosecutor investigates

Government has paused plans to list Agyapa Royalties Limited on the London Stock Exchange pending the Special Prosecutor’s investigations.

“Kindly note that this Ministry does not intend to proceed with the IPO ahead of the results of the corruption risk assessment by your Office,” Deputy Minister of Finance, Charles Adu Boahene, said in a statement addressed to the Special Prosecutor, Martin Amidu.

With investor confidence at stake, which could derail the success of the listing, the ministry has deferred the entire processes, after concerns by sections of the Ghanaian public led by civil society organisations.

The Agyapa Royalties Limited is a firm established to raise about $1billion

“The outcome of the current state of the transaction, and, it would, therefore, be detrimental to proceed without receiving the necessary approvals and green light from your Office,” it released added. “Additionally, we will be required to fully disclose in the prospectus to the transaction, the outcome of any investigation by your office prior to approval by the respective regulators of stock exchanges in Ghana and the United Kingdom.”

The Ministry added that it was on standby “to provide any further information or clarification” for the Special Prosecutor’s risk assessment.

The Special Prosecutor has so far been given information concerning mainly the processes for and the appointment of the Transaction Advisors.

Background to Agyapa Royalties Ltd

Government is looking for cash to finance capital expenditure and wants to leverage the country’s mineral resources to raise $1bn.

In the deal, 75.6% of royalties of at least 16 gold mining companies will go into Agyapa Royalties Ltd.

The company will list on the London Stock Exchange and the Ghana Stock Exchange and float 49% shares valued at $1bn.

It hopes to get investors to buy shares while Agyapa Ltd collects gold royalties from future mineral resources to pay as dividend to shareholders.

Agyapa Royalties Ltd is also incorporated in a tax haven, British channel island, Jersey, where companies don’t pay corporate tax. It means the company will enjoy considerable tax reliefs.

The Finance Ministry has touted the deal as an opportunity for Ghanaians to own a share of the country’s mineral resources and also an inventive way to raise money for development.

But after a coalition of civil society organisations criticised the deal as opaque, the government agreed to widen consultations, promising to engage traditional leaders.