Bright Simons states that three organizations representing individual bondholders plan to file legal suits against the government due to the Domestic Debt Exchange Program.
Bright Simons, the Vice President of IMANI Ghana, has disclosed that three groups representing individual bondholders are mobilising to file legal suits against the government for including individual bondholders in the Debt Exchange Programme. One of the groups is being led by a former boss of the Securities and Exchange Commission (SEC).
The Finance Ministry had earlier warned individual holders of eligible bonds that they would face difficulty obtaining a judgement against the Government of Ghana if they refused to take the Amended and Restated Exchange Memorandum under the Debt Exchange Programme.
In the 58-page Amended and Restated Exchange Memorandum, under a caption labelled “Enforcement of Civil Liabilities,” the Finance Minister, Ken Ofori-Atta, emphasised that any legal action taken by bondholders against the country would be difficult to materialise due to Ghana’s status as a sovereign state.
However, Mr Simons revealed in a tweet that adding individual/retail investors to Ghana’s debt default would increase the risk of litigation, and at least three groups representing individual bondholders had started mobilising to file class-action lawsuits. One of the groups is led by a former SEC boss.
The Finance Minister had announced a Domestic Debt Exchange programme to restructure the country’s debt, which initially excluded individual bondholders. However, after stiff opposition from labour, which led to their exclusion, the government included retail bondholders.