No Hotel Has Been Sold; We’re Engaging Stakeholders – SSNIT

The Director-General of the Social Security and National Insurance Trust (SSNIT), Kofi Bosompem Osafo-Maafo has come out to clear the air on the widely discussed sale of shares of the organisation in some 6 hotels in Ghana to private investors.

SSNIT has been in the news for months since a member of parliament for North Tongu, Samuel Okudjeto Ablakwa raised issues with the process SSNIT deployed to settle on selling its stake in 4 hotels to Rock City. The hotels in question include the Labadi Beach Hotel, La Palm Royal Beach Resort, Elmina Beach Resort, and Busua Beach Resort.

The National Pensions Regulatory Authority (NPRA), following agitations and media reportage, recently directed the SSNIT ‘you are hereby directed by the Board of the Authority to suspend all the processes seeking to engage Rock City Hotel Limited as the Strategic Investor in matter of the sale of above mentioned hotels’.

At a press conference this week, the Mr. Osafo-Maafo stated categorically that none of the hotels in question have been sold; “The hotels have not been sold. The hotels have not been sold; that needs to be repeated”.

“Yes, NPRA did issue a letter asking that we suspend (operative word ‘we suspend’). What they noted in the letter, if you actually went into the details, was that we had met with them and the meeting was inconclusive. What exactly that means is that we had an initial meeting and we were due further meetings or a meeting. We’ve had further meetings and so once we have done that we’ll await what NPRA has to say. But the suspension is not inconsistent with engaging stakeholders. Our current position is not inconsistent with what NPRA has asked us to do”, Mr Osofo-Maafo added.

Even though the Director-General mentioned that the Trust is following the directive of the NPRA, there are some negotiations ongoing with Rock City as the 60% of their shares is still up for sale “We’ve gone according to all the rules and regulations … we and Rock City, we are still negotiating”, the Director-General said during the press conference.

The justification for the sale of these shares are based: Consistent losses by all the hotels; none payment of dividends; demand for regular injection of significant capital to run effectively, among others.

He went on to state that “If you look at these hotels, they are capital-intensive businesses, they require… continuous capital expenditure. SSNIT doesn’t have the necessary funding to do that. The businesses have been making consistent losses.”

“We’ve been through quite a lengthy process to do so. Bear in mind, we’ve also tried having external management companies running the SSNIT hotels and that hasn’t resolved the problem either” he added.
Mr Osafo-Maafo consequently added that “So, for us, we look at it two-fold; that we are looking to resolve a problem and do so with the introduction of a strategic investor and we outlined the reasons there”.

Questions were raised regarding the Trust turning down a proposal from the son of former National Chairman of the New Patriotic Party (NPP), Freddy Blay, worth USD 200 million. Mr. Osafo Marfo claimed that the proposal could not make it past the technical evaluation. The said company of his son is Spartan Ives.

“Spartan Ives did not get past the evaluation stage. Their technical proposal was weak and they scored below the required 50% so their financial proposal was not even assessed. The envelope was not even opened. It was returned to them. That is what the law requires us to do.

So to say that SSNIT received an offer of 150 to 200 million dollars and turned it down is not accurate because the offer was never made, the offer was never opened,” he stressed.