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CONCIUSIONS

1. Based on our review of background documents, interviews conducted, and independent

investigative analysis performed to date, FTI concludes the following:

2. The Payment Securities that were presented by Cal Bank and PDS to MIDA on February

27, 2019, which were subsequently accepted by the Ministry of Finance and ECG, are compliant

with the recommendations contained in URDG 758.

compliant with the recommendations contained in URDG 758. We have not seen any documents that would

We have not seen any documents that would suggest that, as of March 1, 2019, PDS, Cal Bank, Donewell and/or personnel from MIDA should have questioned the validity of the Payment Securities. We further note that officials from Al Koot confirmed to K&L that the stamp applied on the Acknowledgement and Agreement page of the Payment Securities is that of Al Koot. They further confirmed that the signatures are that of Al Nouri and Fadi Danghouth, who are employees of Al Koot.

However, given that ECG is the beneficiary of the Payment Security, they sought guidance from GoG's Financial Advisers on what the best protocol would be to confirm the authenticity of the Demand Guarantees. We further understand that Hunton advised ECG to contact Al Koot directly using contact details other than those contained in the Demand Guarantees to obtain confirmation directly from Al Koot that the demand guarantees were genuine and were validly issued,

3.

produced by Al Koot to GoG, Al Nouri does not have the authority to bind Al Koot in relation to

Based on our review of Section 8. of Al Koot’'s Delegation of Authority, which was

the Demand Guarantee without the Board's approval, which we have not seen as part of the executed PDS transaction documents.

However, as noted in K&L's legal analysis to FTI, in a Cassation Court judgment, the court ruled (in case no, 72/2011) in favor of a party who, in good faith, entered into a transaction which was executed by an unauthorized individual of the other party. In that case, the Cassation Court held that the doctrine of apparent authority applied where an employee fraudulently submitted a purchase order with company stamps in circumstances where she indicated that she was representing her employer. Therefore, the employer in that case was held liable for honoring the obligations entered into by the delinquent employee,

While this case may provide a basis to proceed in a lawsuit against Al Koot, it should be noted that K&L stated that it is difficult for K&L to determine whether or not Al Nouri had apparent/due authority to bind Al Koot. They would need to do a separate and further analysis to make this determination.

4. The Technical Documents Authority List, which includes Al Nouri as an authorized

signatory to technical documents, provides corroboration that Al Nouri had the authority, but unfortunately this document fails to define or detail what is meant by technical documents. Therefore, it does not provide definitive proof of Al Nouri’s authority to execute the guarantees.

5. The structural changes made to the original form of the Payment Securities as

contemplated in the LAA and BSA were approved by the MiDA board, an action that was in line with the prior instructions given by His Excellency the Vice President to authorize PDS to issue the guarantees.

6. PDS could not secure the Demand Guarantees or Letters of Credit as per the requirements

of the LAA and the BSA from a bank because of three “main” challenges:

The delay in agreeing on the list of PPAs made; and
The delay in agreeing on the list of PPAs made; and

PURC's delay in approving the Rate Setting Guidelines and the initial rates that PDS was authorized to charge;

PDS not having a certain level of capital required for the issuance of a cash backed Payment Security.

7.

Payment Securities, only USD1 Million (896) was funded by an equity contribution by a PDS shareholder. USD? Million (57%) was funded by a loan that was advanced by Cal Bank to another PDS shareholder. This loan was repaid from operating cashflows generated by PDS after the

Of the USD12.25 Million that was charged by Cal Bank to PDS as fees for raising the

Transfer Date. The balance of USD4.25 Million (35%) was also paid directly from operating cashflows generated by PDS after the Transfer Date.

8.

Koot refused to produce it when K&L requested it during their meeting. As such, we do not know contents of the license, and are unable to determine if, as a general matter, Al Koot is permitted by its license to reinsure a portion of the risks assumed by a primary insurer under a demand guarantee governed by the Uniform Rules for Demand Guarantee.

We were unable to independently obtain Al Koot’s insurance license and officials from Al

9.

things, that Al Koot would avoid coverage of guarantees, and product warranty and quality.

Based on our review of Al Koot’s Underwriting Guidelines, Page 22 states, amongst other

Al Koot's Articles of Association are silent on whether or not Al Koot is permitted to reinsure a portion of risks assumed by a primary insurer under a demand guarantee governed by the Uniform Rules for Demand Guarantee or by other rules. In addition, K&L confirmed that pursuant to Article 13 of the Articles of Association, Al Koot is permitted to work with other companies as long as the nature of the work is within Al Koot’s objectives, as listed in the Articles of Association,

10. It appears that personnel from Al Koot's reinsurance department previously engaged in

transactions that are similar to the PDS Guarantees. These transactions, which leveraged the strength of Al Koot’s credit rating, were brokered by JoAustralia, and reinsured by Al Koot, with further instructions by Al Koot to JoAustralia to retrocede them to other reinsurers. Based on an arrangement with JoAustralia, a 10% fee was credited back to Al Koot in these types of

transactions. In the case of the PDS Guarantees, FTI confirmed that 15% was retroceded back to a local Ghanaian insurance company. Thus, it appears that Al Koot acted in the manner that would be expected if the demand guarantees that were issued were valid.

11. We have not identified any information to suggest that either PDS, Cal Bank, Donewell

and/or personnel from MiDA committed or conspired to commit fraud or other malfeasance in relation to the demand guarantees.

personnel from MiDA committed or conspired to commit fraud or other malfeasance in relation to the