A COMPANY owned by the billionaire brother of Ghana’s president is accused of waging a campaign of “industrial espionage” to seize a major gold project from international investors, according to allegations supported by leaked emails seen by Miningmx.
The emails, which have been reviewed by this publication, appear to show regular communication between Ghanaian directors of Azumah Resources, the company’s legal adviser, executives of Engineers and Planners Limited (E&P) and a director of South African mining giant Gold Fields during a battle for control of the Black Volta gold project, widely regarded as one of the most significant undeveloped gold projects in West Africa.
James Wallbank, managing partner of Ibaera Capital, the international private equity firm behind the investment, alleged that the correspondence revealed a concerted effort to undermine existing shareholders and paved the way for E&P, the mining firm owned by Ibrahim Mahama, the brother of President John Mahama, to take control of an investment he values at approximately $250m.
There are no allegations of wrongdoing against Gold Fields or the director copied on the correspondence. Gold Fields declined to comment.
The Ghanaian president has been accused by political opponents of favouring his brother’s company through policies aimed at increasing Ghanaian ownership and control of the country’s mineral resources. Critics claim Ibrahim Mahama’s business interests have been among the principal beneficiaries of the government’s push for greater local participation in the mining sector.
Earlier this year E&P won a controversial tender for the Damang gold mine following the removal of its previous operator, South Africa’s Gold Fields, a development that attracted significant attention within the region’s mining industry.
Wallbank was speaking recently at ‘Mining on Top’, a major mining investment conference in Paris, where he said the battle for control of Azumah had damaged Ghana’s reputation among international investors.
As a significant foreign investor in Ghana’s mining sector, he said his company fully supports efforts to ensure Ghanaians receive the greatest possible benefit from their natural resources through partnerships combining international capital and local expertise. The company appointed E&P and local directors, he said, to demonstrate its commitment to increasing Ghanaian participation and prosperity.
“But instead of supporting our investment in Azumah’s Black Volta mine, these Ghanaian directors, our legal counsel, and others waged a campaign of industrial espionage and sabotage to seize our Black Volta gold mine and shares in our company worth $250m. They had a fiduciary, legal and ethical duty to act in good faith on our behalf but instead acted as agents conspiring against us,” Wallbank said.
According to Wallbank, he and his colleagues uncovered a series of emails sent by Azumah’s legal adviser to E&P executives, Azumah directors, senior Ghanaian government officials and a director of Gold Fields.
The correspondence reviewed by Miningmx shows Azumah’s legal adviser discussing legal action affecting Wallbank and copying communications to E&P executives and individuals who now hold positions within government.
Wallbank said he was astonished to discover what he alleges was Azumah’s own legal counsel preparing legal documents adverse to the company’s interests while continuing to act for and be paid by Azumah.
“Azumah’s own legal counsel in Ghana secretly prepared legal documents against Azumah while being paid by Azumah and acting on its behalf, in an effort to prevent the development of the mine. Those emails were sent to E&P directors, representatives of government organisations and other influential figures in Ghana,” he said.
In one exchange, Azumah’s Ghanaian legal counsel informed recipients that an injunction application had been served on Wallbank and that he was “not allowed to take any of the steps complained about” pending a court hearing. The lawyer also suggested that the injunction would provide additional time for E&P to secure financing for a proposed acquisition of Azumah. Minutes later, another recipient replied: “Thank you very much Sir Bobby. Excellent job.”
E&P rejected Wallbank’s allegations and denied any corporate wrongdoing.
“Miskakes have been made”
However, Theophilus Agbenyezi of Ghana’s Minerals Commission acknowledged that mistakes had been made and said the government was committed to rebuilding investor confidence as part of an economic reset announced by President Mahama during a visit to London last month.
“Yes, the government has made mistakes,” Agbenyezi said. “It is absolutely important to work with international investors to bring money to Ghana.”
He said Ghana was committed to addressing past shortcomings and restoring confidence in the country’s mining sector.
“The challenge is to fix the problems,” he said. “We are looking forward to working together.”
An arbitration hearing in London is expected to consider aspects of the dispute between E&P and Azumah’s international investors in September, but Wallbank said his company’s experience raises broader questions about Ghana’s attractiveness as a destination for foreign investment.
“As a significant international investor, we expect the Government of Ghana to uphold the law and maintain fair play and a level playing field. The Azumah experience has been bitter for everyone involved.
“It leaves one unanswered question: can the resource nationalism that everyone supports be delivered to benefit all Ghanaians while maintaining a genuine respect for the rule of law and fair play for international investors?”