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Page last updated at 13:19 GMT, Tuesday, 13 October 2009 14:19 UK

Ghana's Vodafone deal 'illegal'

Man talking on mobile phone
The report said the government did not get value for money for the sale of GT

The sale of Ghana's state-owned telecoms firm to UK's Vodafone was "unconstitutional and illegal", a leaked Ghanaian government report says.

The UK-based mobile company bought a 70% stake in Ghana Telecom (GT) and its assets for $900m (£570m) last year.

The report, seen by the BBC, said GT was undervalued and ultimately the price paid for GT was less than $267m.

President John Atta Mills had promised to investigate the controversial deal before his election last December.

The BBC's David Amanor in the capital, Accra, says Mr Atta Mills' National Democratic Congress party (NDC) had objected to the $900m price tag while they were in opposition last year.

Critics said it was too little for the assets, which included terrestrial, mobile and fibre-optic cable networks and an academy known as Ghana Telecom University.

'Renegotiate'

The report said Ghana's parliament had acted unconstitutionally in ratifying the deal without due process.

And it alleged that "through a complicated series of financial arrangements" the actual price released was less than $267m - far less than the annual earnings potential of GT.

It questioned why Vodafone's bid was approved when other firms like Telkom South Africa were offering higher bids for a lesser stake, and says the government did not get value for money.

The report, compiled by a government review committee chaired by a retired appeal court judge, recommended a renegotiation of the deal with Vodafone.

It also said "although strong allegations were made about bribery and corruption" the committee "did not have the powers and resources to investigate these claims".

The report comes in the wake of a corruption scandal which saw two government ministers resign over the weekend.

George Sipa Yankey, who was health minister, and Seidu Amadu, a minister of state in the presidency, are alleged to have accepted bribes from a British construction company.

The firm, Mabey and Johnson, was ordered by a British court last month to pay more than $7m in fines after admitting it bribed officials in Ghana in the 1990s, when the NDC was in power.



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