Govt has shown total disregard for contractual rights of individual bondholders – IBF

Convener of the Individual Bondholders Forum (IBF) Senyo Hosi, has said regarding the domestic debt exchange programme that in an unfortunate oppressive fashion, the government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders.

In the process, the IBF said, Ghanaians have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable.

“This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission,” a statement issued by Hosi said.

The Government of Ghana (GoG) announced that under its Domestic Debt Exchange (DDE) programme, individual bondholders were to submit to a “voluntary” arrangement to exchange their domestic bonds for new benchmark bonds.

This arrangement, according to IBF, irreversibly takes away the wealth and livelihoods of direct and indirect individual bondholders whose only crime has been to trust their government.

Tied to this is a mandatory deadline which compels holders to either accept the government’s offer or risk the threat of prohibitive losses, the Forum added.

It stressed “In an unfortunate oppressive fashion, government has shown total disregard for the contractual rights of Individual bondholders and has made no effort to structure reasonable consultations with individual bondholders. In the process, we have been presented with painfully stark, impoverishing and unsustainable choices – a situation deeply troubling and wholly untenable. This is only possible because of the absence of effective representation and the perceived ease of oppressing a dispersed section of investors into submission.”

Individual Bondholders’ forum (IBF)

The Individual Bondholders’ forum (IBF) is a voluntary group of individual bondholders established with defined governance structures to coordinate and defend the interests of individual bondholders in respect of the DDE program and to engage the GoG.

We provide legal, public advocacy and negotiation representation for members with investments in: GoG Local Cedi Bonds; GoG Local USD Bonds; ESLA Bonds; Daakye Bonds; Ghana Eurobonds; Collective Investment Schemes (i.e., Mutual Funds, Cash Trusts, Balanced Funds). We urge all qualifying individual bondholders to join our membership via our website at www.ghanaibf.com.

IMMEDIATE STEPS

Pending further consultations and engagements (including the pursuit of legal action where necessary), we entreat as follows:

Direct Bondholders: Reject and refrain from complying with the mandatory deadline imposed under the DDE program and join the efforts of the IBF.

Indirect Bondholders (Investors in mutual funds, cash trusts, balance funds).

Inform your fund managers not to accept the DDE. Government Kindly open a channel of communication for immediate frank, transparent and sincere dialogue on the DDE with the IBF with the view to seeking an effective resolution to the developing impasse and the fast-depleting confidence in the Ghanaian economy.

The medium- to long-term prospect and outlook of the domestic investment culture in Ghana is going to be affected by this DDE initiative and we call on government to demonstrate the needed sensitivity to enable a constructive resolution in the best interest of all. We call on labour unions to join us in this fight for the preservation of hard-earned savings invested by the Ghanaian public which also includes their members. We also look forward to partnering likeminded groups and organizations to achieve our joint goals.

Source:3news.com