Ghana Puts Gold Fund IPO on Hold as State Prosecutor Probes Deal

(Bloomberg) -- Ghana suspended plans to raise $500 million in an initial public offering of a gold-royalty fund after the state prosecutor began an investigation into the sale, according a government document seen by Bloomberg.

Africa’s biggest gold producer won’t proceed with the IPO until the Office of the Special Prosecutor has concluded its probe, the Finance Ministry said in an Oct. 1 letter to the authority. The OSP announced Sept. 30 it’s assessing the risk of corruption in the royalty-fund offering after civil society and opposition groups criticized the deal for a lack of transparency.

Finance Ministry spokeswoman Cecilia Akwetey said she couldn’t comment when contacted on Monday.

The ministry will collaborate with the prosecutor’s office and await the results of the assessment before proceeding with the offering, it said.

The share sale had been scheduled to start in September to take advantage of record gold prices. The fund will be structured to pay dividends from the government’s income from gold operations and be listed in London and on the domestic stock exchange.

Ghana plans to use the proceeds from the offering to invest in other producers, develop a refinery and invest in jewelery tourism.

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