FTI Response - 5830100 Forensic Audit RFP - Sent To Client

AUGUST 30, 2019
FINAL SUMMARY OF FINDINGS REPORT
FORENSIC AUDIT/INVESTIGATION INTO DEMAND GUARANTEES

SUBMITTED BY POWER DISTRIBUTION SERVICES
RFP: 5830100/RFP/QCBS/08/19
Final Summary of Findings Report
AUGUST 30, 2018
This Final Summary of Findings Report (“Final Report”) is intended solely for the internal use of the
Millennium Development Authority (“MiDA”), as outlined in the Contract for Consulting Services between
FTI Consulting, Inc. (“FTI”) and MiDA dated August 16, 2019 (“Letter of Engagement”).
These observations are based upon the information currently available to FTI. In this respect, it should be
noted that, as of the date of this Final Report, FTI has not been able to speak to Osman Hag Musa, Chief
Officer of General Insurance, AL Koot Insurance & Reinsurance Company S.A.Q., whose letter dated July
16, 2019 was a major factor in the commissioning of this investigation.
As we have noted, FTI’s services do not constitute an engagement to provide audit, compilation, review,
or attestation services as prescribed in pronouncements on Professional Standards issued by the American
Institute of Certified Public Accountants or any successor standard setting body. Further, FTI does not
provide legal advice or opinions. MiDA should consult with its legal counsel for such matters. This
document has been prepared for and is intended solely for the use of MiDA and their Counsel. This
document is not to be circulated or published without FTI’s express written permission to any third party
in accordance with the terms set forth in the Letter of Engagement. FTI will not be responsible for any
losses suffered by any other party as a result of the use of this report contrary to the provisions of this
paragraph.
Confidential Information
For Discussion Purposes Only
Table of Contents
Background .......................................................................................................................................2
Methodology .....................................................................................................................................3
Executive Summary of Observations...................................................................................................6
Activities in Ghana ....................................................................................................................................................6
Activities in Jordan ..................................................................................................................................................13
Activities in Qatar ...................................................................................................................................................15
Conclusions .....................................................................................................................................19
Terms of Reference Questions ..........................................................................................................21
Terms of Reference Response Outline ...................................................................................................................22
For Discussion Purposes Only P a g e |1
Background
The Republic of Ghana (“Ghana”)—represented by the Electricity Company of Ghana (“ECG”) and the Ministry of
Finance (“MoF”)–and Power Distribution Services (“PDS”), signed the Private Sector Participation (“PSP”)
Transaction Agreements (“Transaction Agreements”) on July 3, 2018. The Transaction Agreements consist of the
Lease and Assignment Agreement (LAA), the Bulk Supply Agreement (BSA), and the Government Support
Agreement (GSA). Cabinet, at its 35th Meeting on June 14, 2018, considered and approved the Transaction
Agreements, and recommended same to Parliament for consideration.
The Transaction Agreements as executed had forty-five (45) Conditions Precedent (CPs) that were supposed to be
completed prior to the Transfer Date. CP Nos 24 and 31 required PDS to furnish to ECG an initial Payment Security
in the form of either a demand guarantee or a Letter of Credit issued by a Qualified Bank against power purchases
and lease payments. Due to difficulties with raising a bank guarantee, and in the absence of tariffs set in
accordance with the Public Utilities Regulatory Commission (“PURC”) Rate Setting Guidelines, Ghana approved
PDS’s request to submit demand guarantees issued by an insurance company.
PDS delivered the Guarantees on February 27, 2019, prior to the Transfer Date on March 1, 2019. The main
guarantor in a structure consisting of Cal Bank, Donewell Insurance Company Limited (“Donewell”), and JoAustralia
Reinsurance Brokers (“JoAustralia”), was Al Koot Insurance and Reinsurance Company S.A.G (“Al Koot”) in Qatar.
On Sunday, July 28, 2019, MiDA received a copy of a letter dated July 16, 2019 purportedly from Al Koot and
addressed to ECG, in which Al Koot claimed that Yahya Al Nouri, the officer who executed the guarantees on behalf
of Al Koot, was not authorized to do so, and that Al Koot was also not authorized to underwrite trade risks. It also
claimed that an earlier letter received on March 13, 2019 from Al Koot on the same matter had been forged.
Since then, MiDA has received documentation that contradict some of the key assertions in the July 16, 2019
letter. In the meantime, Ghana and ECG have suspended the Transaction Agreements based on the July 16, 2019
letter from Al Koot.
Given the above, the MiDA board commissioned an Ad Hoc Special Committee to oversee an investigation focused
on understanding the facts relating to the issuing of the guarantees and the subsequent retraction by Al Koot.
Methodology
The purpose of this Final Report is to summarize the findings of our investigation, which included the review and
analysis of documents, as well as interviews of individuals involved in the events at issue. Our methodology
included the following procedures and work steps:
A. Identification and Collection of Relevant Documents

At the outset, FTI was provided relevant documents that had been collected by MiDA. Thereafter, during
our interviews of personnel from MiDA, PDS, Cal Bank, Donewell, JoAustralia and Al Koot we gained an
understanding of the process used to review and approve the Payment securities, as well as the
documents that had been generated. FTI requested and collected relevant documents during and/or after
interviews with personnel from the above-described companies. In some instances, which are noted
below, FTI was only allowed to view documents, and not allowed to make and keep copies.
B. Interviews
The FTI Team conducted interviews of the individuals outlined in the table below. FTI also engaged the
services of K&L Gates (“K&L”) in Qatar, and directed K&L to conduct certain interviews. Our decisions
regarding whom to interview and whom to direct K&L to interview were based on our review of
documents, interviews, and recommendations from the MiDA Board Ad Hoc Special Committee. The
purpose of the interviews was primarily to better understand the key issues to be investigated, identify
other individuals with relevant information, and identify additional relevant documents needed to
perform our review.
i. Interviews Conducted by FTI
Interview Date Company Personnel Location

August 18, 2019 Donewell Insurance Company Limited Donewell Office
 Seth Aklasi, Chief Executive Officer
 Frieda Aniwaah Boateng – Company
Secretary, Legal and Compliance
Manager
August 18, 2019 Power Distribution Services Ghana PDS Office
 Philip Ayesu, Chairman
 Sophia Kokor – Legal Representative to
PDS
August 19, 2019 Cal Bank Cal Bank Office
 Frank B. Adu Jnr – Managing Director
 Phillip Owiredu – Executive Director
 Justina Laing – Group Head Corporate
 Papa Kweku Amissah – Corporate &
Project Finance Department
 Agnes Matilda Mends-Armstrong –
Corporate & Project Finance
Department
August 20, 2019 National Insurance Corporation NIC Office
 Michael K. Andoh – Deputy
Commissioner of Insurance
 Seth K. Eshun – Head of Supervision
August 21, 2019 Millennium Development Authority MiDA Office
 Julius Kwame Kpekpena, Chief
Operating Officer
August 21, 2019 Best Assurance Best Assurance Office
 Franklin Owusu Asafo-Adjei, Chief
Executive Officer
 K. Bosompem-Mensa, Chief Finance
Officer
 Andrew Osei-Bonsu, Head Internal Audit
& Inspection
 Maxwell Mensah, Head Claims & Risk
Management
August 22, 2019 Criminal Investigations Department CID Office
 Chief Supt. Regina A. Tengey (Head
Financial Forensics Unit)
 John Bishop, Lead Investigator
August 22, 2019 JoAustralia Reinsurance Brokers JoAustralia Office
 Munir Wahhab, Chairman & CEO
 Michael Ennab, Reinsurance Manager
August 23, 2019 Electricity Company of Ghana ECG Office
 Ing. S. Boakye-Appiah, Managing
Director
 Ing. Samuel Adjidjonu, Deputy Managing
Director
August 23, 2019 Power Distribution Services Ghana PDS Office
 Philip Ayesu, Chairman
 Sophia Kokor – Legal Representative to
PDS
 Other Officials from PDS
August 24, 2019 Donewell Insurance Company Limited Donewell Office
 Seth Aklasi, Chief Financial Officer
August 25, 2019 ECG ECG Office
 Ing. Samuel Adjidjonu, Deputy Managing
Director
 Leonardo Lamptey, Director Corporate
& Legal Services
 Mustapha Zakaria-Cisse, Director Energy
Trading
August 29, 2019 Criminal Investigations Department CID Office
 John Bishop, Lead Investigator
ii. Interviews Conducted by K&L

August 25, 2019 Al Koot Insurance and Reinsurance Al Koot’s Office
 Rahul Kumar, Legal
 Mauricio Barmola, Internal Audit
 Shawqi Khalil, Claims
C. Business Intelligence Research: Background Research

Online public records research and social media analyses were conducted in order to identify personal
information, business affiliations, corporate interests, assets, regulatory filings, and news media reports
regarding the following individuals and entities:
 Al Koot Insurance and Reinsurance; and
 Yahya Al Nouri
Executive Summary of Observations
Activities in Ghana
1. Power Distribution Services Ghana (PDS) faced several challenges in securing the Demand Guarantee or
Letter of Credit based on the requirements of the Lease and Assignment Agreement and the Bulk Supply
Agreement. These challenges were mainly attributable to the following:
1.1 The Public Utilities Regulatory Commission’s (PURC) delay in approving the Rate Setting
Guidelines and the initial rates that PDS was authorized to charge. This delay made it difficult for
PDS to make available to prospective lenders sufficient financial information to raise project
financing;
1.2 The delay in agreeing on the list of Power Purchase Agreements (“PPAs”) made. This delay also
made it difficult for PDS to make available to prospective lenders sufficient financial information
to raise project financing; and
1.3 PDS not having a certain level of capital 1 required for the issuance of a cash backed letter of
credit, which was an option offered by some financial institutions that PDS had approached. We
were informed during interviews that PDS was offered the opportunity to secure a cash backed
letter of credit if it could deposit USD350 Million in its bank account.
2. Introduction of the Demand Guarantee issued by an insurance company.
2.1 On January 21, 2019, PDS formally requested the support of Cal Bank as its primary Bankers to
arrange and issue two separate Demand Guarantees to fulfill the requirement of the Transaction
Agreements. Given the compressed timeline to meet the revised February 1, 2019 Transfer Date
deadline, Cal Bank advised PDS on an alternative structure involving Demand Guarantees that
would be issued by an insurance company.
2.2 On January 21, 2019, Cal Bank arranged a meeting between themselves, PDS, and Donewell
Insurance Company Limited (“Donewell”) to discuss the alternative structure. We understand
from our interviews that Cal Bank had a pre-existing relationship with Donewell and had worked
with them on several other transactions that required insurance related products.
3. Approval of the Demand Guarantee structure issued by an insurance company.
3.1 On February 4, 2019 there was an informal MiDA Board meeting 2 where the Government of
Ghana’s Financial Advisors—the International Finance Corporation (“IFC”) and Hunton Andrews
Kurth (“Hunton”)—delivered a presentation titled, “Private Sector Participation in ECG, Transfer
1 We have not been presented with PDS’s historical financial data to make a determination as to how well PDS was capitalized.
2 This was considered an informal board meeting because the MiDA board did not have a quorum. Based on our review of the
sign in sheet, the meeting was also attended by representatives from PDS, ECG, Energy Commission, Ministry of Finance, and
Ministry of Energy.
Date – Key Actions and Risk”. With respect to the Payment Securities, the Financial Advisors’
Presentation noted the following:
• “A letter of credit or demand guarantee from a commercial bank that meets the ratings
requirement results in a simple structure (from ECG’s perspective).
• A project financed letter of credit or demand guarantee from a commercial bank: (i) provides
security to ECG; (ii) also provides comfort to Ghana that the issuing bank has conducted a
proper credit analysis and that the transaction is bankable.
• A project financing should take six months or more to implement, so PDS has proposed that
insurance companies issue the payment security. We are not confident that the insurance
companies have analyzed PDS’s credit and understand the risk they are assuming.
• A demand guarantee from an unrated insurer introduces additional complexity, resulting in

significant effort on due diligence and structuring.”
As a way of mitigating the risks of PDS’s proposed insurance backed demand guarantee
structure, the Financial Advisors recommended that the MiDA Board continue to work with PDS
and the insurers to confirm the payment security structure. The specific recommended steps
included:
• “Refine documentation to, among other things, ensure that ECG will have a direct claim
against reinsurers.
• Confirm the level of risk primary insurers will cede to reinsurers.
• Consider suitability of ratings requirement for reinsurers (primary insurers are not rated).
• Confirm identity and ability of reinsurers to pay.
• Confirm identity and ability of primary insurers to pay.”
We understand that, at the informal board meeting, the represented MiDA board members
accepted the structure in principle and charged the Stakeholders to work with PDS and Cal Bank
to agree on the text of the Demand Guarantees. 3 It is, however, important to note that, although
the represented MiDA board members accepted the proposed demand guarantee structure, the
final “approval” was given during a meeting with the Vice President on February 19, 2019, and
the Ministry of Finance and ECG were the parties who were involved in the “acceptance” of the
final Payment Securities.
3.2 Based on documentation reviewed, an email was sent on February 19, 2019 by MiDA to confirm
that, as per the instructions of His Excellency, the Vice President, they wished to inform the
recipients of the email that MiDA was willing to give PDS the Notice to Proceed to issue the
Demand Guarantees for the BSA Payment Security and the Lease Payment Security. Among those
3 We understand that no formal minutes were kept because the board did not have a quorum. However, from our review of
background documents, we note that, with the assistance of the Financial Advisers, the parties worked together to strengthen
the language and provisions contained in the insurance backed demand guarantees. The updates, which included the
introduction of a cut-through clause, were targeted at increasing transparency and strengthening ECG’s position.
copied on the email were the Minister of Finance and Chairman of ECG. An email from MiDA to
the Ministry of Finance on February 27, 2019 copying, amongst others, the Minister of Finance
and the Chairman of ECG states the following about the February 19, 2019 meeting:
“On Tuesday, Feb 19, 2019, a high level meeting at the Jubilee House considered the structure of
the Demand Guarantees for the Lease Payment Security and the BSA Payment Security proposed
by PDS in place of a Bank Guarantee or Letter of Credit. This meeting built on the earlier Meeting
of the MiDA Board (January 4, 2019) 4 that accepted the structure in principle and charged the
Stakeholders to work with PDS and their bankers to agree on the text of the Demand Guarantees.
Thereafter, the Guarantees were drafted by MiDA's Advisers and agreed to by Cal Bank and PDS.
The meeting at the Jubilee House was chaired by His Excellency the Vice President. Others at the
meeting include the Chief of Staff, Hon. Minister for Finance, two Deputy Ministers for Energy,
MiDA Board Chair and CEO, ECG Board Chair and MD. Other senior officers from these ministries
and agencies were also present at the meeting.
At the end of the discussions, MiDA was instructed to authorize PDS to issue the guarantees. By
that instruction, MiDA presumed that the structure and text of the Demand Guarantees had been
approved and acted on the instruction to authorize PDS and their bankers.”
3.3 On February 21, 2019, the MiDA board passed a resolution that the “Board takes note of the
proposal for the BSA Payment Security and Lease Payment Security which proposed the four local
and two international insurers and reinsurers namely Enterprise Insurance, Quality Insurance,
Donewell Insurance, Glico Insurance, Al Koot and Kuwait Re.”
3.4 On February 27, 2019, Cal Bank and PDS presented to MiDA the final hard copy version of the
Demand Guarantees. Based on our review of the structure of the demand guarantee, we confirm
that it is compliant with what was recommended under the International Chamber of Commerce,
Uniform Rules for Demand Guarantees (“URDG 758”).
3.5 On February 27, 2019, a scanned copy 5 of the Demand Guarantees was sent by MiDA via email to
the Ministry of Finance, copying the Chairman of ECG, stating, amongst other things, that:
“PDS has now submitted the executed Guarantees. Kindly find attached scanned copies of the
Guarantees (We are working to produce better quality scans). We would be grateful if you could
receive your authorization to accept the guarantees. The approved texts of the guarantees are
also attached.”
3.6 On February 28, 2019, via a letter to the Honorable Minister of Finance and Honorable Minister
of Justice and Attorney General, ECG confirmed their acceptance of the Demand Guarantees. It
4 Based on our discussions with MiDA and a review of background documents, the referenced MiDA board meeting took place
on February 4, 2019.
5 During our discussions with ECG, they were surprised that they were only sent a scanned copy of the Payment Securities for
approval. ECG further noted that, given the value of the Payment Securities and the fact that they were also the beneficiaries,
proper business practices would have required that MiDA send them the original hardcopy version of the Payment Securities as
issued by Cal Bank for their review and approval.
should, however, be noted that, on the same day, ECG wrote several letters, including the
following:
• A letter to the Honorable Minister of Finance stating, amongst other things, that they had no
objection to a proposal to convert the requirement of the Payment Securities into
Conditions Subsequent, which PDS was required to settle within five business days.
• A letter to the Honorable Minister of Justice and Attorney General stating that there was a
change in the counterparties to the Demand Guarantees that was presented and approved
by the MiDA Board of Directors during its meeting held on February 21, 2019. ECG also
noted in the letter that the Demand Guarantees issued by PDS were materially different
from the payment securities required by the LAA and the BSA.
• A letter to the Honorable Minister of Justice and Attorney General seeking an urgent
confirmation of whether there will be the need for Cabinet approval and Parliamentary
ratification for the amendments to the Transaction Agreements and documents as a result of
these changes. The Attorney General’s opinion letter, which was received on March 1, 2019,
implied that there was no need for Cabinet approval, nor Parliamentary ratification.
Paragraph 2.1.2 specifically states that:
“Mr. Ken Ofori-Atta, Honourable Minister for Finance, was duly authorized to execute and
deliver the GSA, the Transfer Date Confirmation Letter and the CP4 Letter Agreement. ECG
was duly authorised to execute and deliver the BSA, the LAA, the Transfer Date Confirmation
Letter and the CP4 Letter Agreement. The Minister of Finance was authorized to approve,
execute and deliver on behalf of Ghana such other documents, notices and confirmations and
to do all other acts and things as in his absolute and unfettered discretion he deems
necessary or incidental in connection with the terms of any of the GSA, the Transfer Date
Confirmation Letter or the CP4 Letter Agreement and his signature legally binds Ghana.”
• A letter to MiDA stating, amongst other things, that there was a change in the
counterparties to the Demand Guarantees that were presented and approved by MiDA’s
Board of Directors during its meeting held on February 21, 2019. ECG also noted in the letter
that the Demand Guarantees issued by PDS were materially different from the payment
securities required by the LAA and the BSA. Finally, the letter mentioned that, during the
joint CP Committee meeting held on February 27, 2019, 6 they had escalated several
concerns, including that (a) the payment securities had been signed on behalf of Al Koot by
Al Nouri, a manager in the reinsurance department; and (b) a confirmation should be
obtained that Al Koot was in compliance with laws and regulations in relation to the large
exposure that the company had undertaken towards ECG.
3.7 On March 1, 2019, the Transfer Date Confirmation Letter that was executed by ECG, PDS and the
Ministry of Finance confirmed, amongst other things, that the initial BSA Payment Security
(CP24) and Lease Payment Security (CP31) requirement had been “Satisfied”.
6We do not have a copy of the February 27, 2019 CP Committee meeting minutes (or other documents outlining what occurred
at this meeting) to which ECG made reference to in the letter.
4. Due diligence with respect to the demand guarantees
4.1 Regarding conducting the required diligence before the issuance of the PDS Guarantees, it should
be noted that Article 10 of URDG 758, provides guidelines for an Advising Party, which it defines
as “the party that advises the guarantee at the request of the guarantor.” Based on a review of
documents, Cal Bank refers to themselves as the “Advising Bank” in Paragraph F of the February
2019 agreement between Cal Bank and PDS. We understand that Cal Bank was retained by the
PDS, the Applicant, and not Donewell, the Guarantor. However, as part of our analysis, we note
that the guidelines outlined in Article 10 paragraph “a” of URDG 758 states the following about
the “Advising of Guarantee and Amendment”:
“A guarantee may be advised to a beneficiary through an advising party. By advising a guarantee,

whether directly or by utilizing the services of another party ("second advising party"), the
advising party signifies to the beneficiary and, if applicable, to the second advising party, that it
has satisfied itself as to the apparent authenticity of the guarantee and that the advice accurately
reflects the terms and conditions of the guarantee as received by the advising party.”
4.2 Based on our review of the presentations that were made by GOG’s Financial Advisors dated
February 4, 2019 and February 21, 2019, we understand that several steps were taken by GoG’s
Financial Advisors to address the identified risks. The GoG Financial Advisors commented on the
draft demand guarantees circulated by Cal Bank, which led to a significant restructuring of the
demand guarantees. In particular, the comments were designed to ensure that:
• ECG would, by virtue of the cut-through provisions, have a direct cause of action against
the reinsurers that would not be impaired by the insolvency of a primary insurer;
• the liability of the reinsurers under the cut-through provisions would not be impaired by
any failure of the primary insurer to pay premiums to a reinsurer;
• the reinsurers would execute the demand guarantees themselves, which included a
complete statement of the obligations of the reinsurers so that it would not be
necessary for ECG to examine cover notes or other reinsurance arrangements and
would only need to examine the demand guarantees themselves.
In addition, one of the revisions the GoG Financial Advisors made to the form of the demand
guarantees was to include a schedule in the demand guarantees themselves that clearly indicate
the level of risk ceded to the reinsurers. As a result, this is clear from the demand guarantees
themselves. The GoG Financial Advisors also sought to obtain S&P’s rating of Al Koot directly
from S&P. 7 The identity and ratings of the reinsurers were included in the demand guarantee.
These were part of the changes made by the Financial Advisors. In addition, we noted that the
Transfer Date Confirmation Letter includes provisions that were designed to address the
consequences of a primary insurer failing to meet the solvency requirements they are required
to meet by Ghanaian law.
7We understand that ECG objected to the rating by S&P on the grounds that it was a local currency rating, and by citing an
article which indicated that there are some differences in the way that S&P determines ratings in relation to the senior
unsecured obligations of a bank or other corporate entity and the ability of an insurer to pay claims.
For Discussion Purposes Only P a g e | 10
Finally, FTI gathered during interviews that Hunton advised ECG to contact Al Koot directly using
contact details other than those that are contained in the demand guarantee to obtain
confirmation from Al Koot that the demand guarantees were genuine and were validly issued. It
should be noted, however, that ECG stated that no such advice was given to them by Hunton,
and that their attempts to contact Al Koot were based on their own internal due diligence
requirement, as well as the fact that the Demand Guarantees were signed by a reinsurance
manager, and they were only provided with scanned copies rather than the original version.
5. Cal Bank charged an all- in fee of 3.50% for advising on the issuance of the Demand Guarantee.
5.1 For the USD350 Million Demand Guarantees, the total fees paid to Cal Bank were USD12.25
Million. Of this USD 12.25 Million, USD7 Million was paid to Donewell for the cost of the
insurance premium, while USD4.25 Million was retained by Cal Bank. The table below shows how
the fees were raised:
Financier Amount Post Date Source
Philip Ayesu USD1 Million February 22, 2019 Personal Equity Contribution
Santa Baron 8 USD7 Million February 26, 2019 Personal Loan Advanced by Cal Bank 9
PDS USD4.25 Million May 17, 2019 10 PDS Operating Cashflows 11
Total USD12.25 Million
5.2 We confirmed with the relevant government agencies that Donewell paid the required
withholding tax (5%) and NIC levy (1.5%).
5.3 The total insurance premium of USD7 Million was posted to Donewell’s Cal Bank account on
February 27, 2019. As reported by Donewell, a portion of this amount was distributed to four
local Ghanaian reinsurers 12 and JoAustralia (the reinsurance broker) in the following
amounts/percentages. We received swift transfer confirmations with instructions from Donewell
to transfer funds to JoAustralia. We confirmed during our interviews with JoAustralia that they
received their portion of the premium payment.
Company Name Amount Share Comments
Amount Retained
Donewell USD148,008 2.11440% Primary Guarantor
Reinsurance Apportionment 13
8 Santa Baron is associated with Kwabena Boateng Aidoo, who is one of PDS’s shareholders.
9 We understand from PDS that this was a loan from Cal Bank to one of the shareholders of PDS. This loan was repaid back to
Cal Bank through cashflows from operation activities.
10 This date is the date that was reflected as the Value Date on the PDS Investment Account.
11 We understand that the balance of USD4.25 Million that was owed to Cal Bank was paid by PDS through cashflows from
operating activities.
12 We did not trace to Donewell’s bank account the payments made to the four local reinsurance companies.
13 We note that Enterprise Insurance, whose name was mentioned in the February 21, 2019 MiDA board meeting resolution,
was not listed as a reinsurer in the documents that were provided to us by Donewell. We understand from Aklasi that
personnel from Enterprise Insurance were not responsive to his messages seeking their interest to provide cover.
Company Name Amount Share Comments
Ghana Union Assurance 679 0.00970% Reinsurer
Quality Assurance 1,799 0.02570% Reinsurer
Glico General Insurance 54,712 0.78160% Reinsurer
Phoenix Insurance 4,802 0.06860% Reinsurer
JoAustralia 6,650,000 95.00000% Reinsurance Broker – Al Koot
JoAustralia 140,000 14 2.00000% Reinsurance Broker
Total Distribution USD7,000,000 100.00000%
6. The Ghana National Insurance Commission confirmed directly to FTI that Donewell sought the necessary
regulatory approval with respect to the issuance of the PDS Demand Guarantees.
7. We have not identified any information to suggest that either PDS, Cal Bank, and/or Donewell committed
or conspired to commit fraud or other malfeasance in relation to the demand guarantees. We would
note, however, that:
7.1 On January 21, 2019, PDS formally requested the support of Cal Bank as its primary Bankers to
arrange and issue two separate Demand Guarantees to fulfill the requirement of the Transaction
Agreements. PDS was not involved in the day-to-day process to procure the payment Securities.
They, however, relied on Cal Bank to manage the process.
7.2 Cal Bank had a pre-existing relationship with the local Ghanaian shareholders of PDS. Once PDS
was registered on June 29, 2018, Cal Bank continued to pursue a relationship with the newly
created entity. On October 31, 2018, Cal Bank opened up an account for PDS and was later
retained by PDS on January 25, 2019 to assist with structuring and arranging the Payment
Securities required on the LAA and BSA.
7.3 Donewell was introduced to the transaction by Cal Bank, with whom Donewell had a pre-exiting
relationship. Similarly, on several occasions, Donewell had procured the services of JoAustralia to
assist with brokering reinsurance covers for several transactions. One of those transactions was a
facultative reinsurance payment guarantee bond of USD26 Million for IBISTEK for the
establishment of an inland Container Depot. JoAustralia brokered the reinsurance of 79% of the
bond, of which Al Koot was allocated 14%.
14We confirmed that Donewell made this payment to JoAustralia, who also confirmed that the additional 2% cover was
provided by Kenya Reinsurance Corporation Ltd.
Activities in Jordan
8. We note, that during our interview with officials from JoAustralia 15 on August 22, 2019, they stated that
they had a pre-existing relationship with Donewell and have assisted them on several occasions with
brokering reinsurance coverage as discussed in Paragraph 7.3.
8.1 JoAustralia further noted that they have been conducting business with Al Koot since early 2017.
Based on our review of documents 16 shown to us during the interview, it appears that both
JoAustralia and Al Koot had a two-way business relationship, meaning that, on some occasions,
JoAustralia would refer business to Al Koot, while on other occasions, Al Koot would refer
business to JoAustralia.
8.2 JoAustralia has net-business of approximately USD12 Million per year with Al Koot. In the past
year, JoAustralia has brokered approximately 44 different reinsurance transactions on behalf of
Al Koot, with five of them similar to the PDS transaction. We were shown documentary evidence
of these transactions, but were not allowed to make copies of the documents.
8.3 JoAustralia typically deals with the members of the reinsurance department at Al Koot, which
includes the following individuals: Yahya Al Nouri, Junaid Kasmani, Lama Mansour, and Natarajan
Kumar. From a procedural perspective, JoAustralia would send opportunities to a general
mailbox of Al Koot’s reinsurance department, and, to JoAustralia’s understanding, anyone in the
department could pick up the request and respond to them.
8.4 When JoAustralia started doing business with Al Koot in 2017, JoAustralia requested that Al Koot
send them a list of staff that were authorized to sign technical documents, as many of
JoAustralia's clients were requesting this information prior to dealing with Al Koot. In response to
this request, JoAustralia stated that Yahya Al Nouri sent them an email, copying Osman Hag
Musa, and attaching a document with Hag Musa’s, Al Nouri’s and Shawgi Khalil’s names that
stated that, “The following staff are authorized to sign all Technical documents of Al Koot.”
JoAustralia confirmed that their understanding was that "Technical Documents" referred to
reinsurance contracts and related documents. JoAustralia stated that Hag Musa's signatures
appeared to be consistent throughout the period they have dealt with Al Koot.
8.5 There is no “master service agreement” between Al Koot and JoAustralia as each
transaction/business is a separate contract/deal.
8.6 Due to the reciprocal nature of the business relationship between JoAustralia and Al Koot,
JoAustralia has an open account with Al Koot, and this account would be credited or debited as
necessary, but periodically a payment would be made by JoAustralia or received by JoAustralia,
as per the balance of the account.
9. JoAustralia noted that they broker various types of reinsurance coverages with Al Koot, including but not
limited to, those relating to trade risk and demand guarantees. JoAustralia, however, noted that, in the
past, trade risk related transactions were done on a full “retro-basis”-- meaning that Al Koot would take
Our discussions were with Munir Wahhab, Chairman and CEO; and Michael Ennab, Reinsurance Manager.
15
FTI has not performed any procedures to validate the authenticity of the documents that were shown to us by JoAustralia.
16
We did not receive a copy of these documents.
on the credit risk, but would effectively retrocede 100% of the risk for a 10% “fronting fee”-- a process
that would allow for the risk not to be reflected on Al Koot’s net-account.
10. Regarding the PDS transaction, JoAustralia noted the following:
10.1 Donewell approached JoAustralia to secure a 95% reinsurance cover for the Demand Guarantees
in favor of Cal Bankand/or ECG.
10.2 Based on Donewell’s request, JoAustralia approached Al Koot’s Reinsurance Department (like
they would with any other deal). JoAustralia discussed the deal with Al Nouri in his capacity as
reinsurance manager. Initially, Al Nouri was not willing to take the risk under their net-account
but due to the “low risk and good fees”, Al Nouri agreed to take this deal on a retro-basis. Once
the deal was consummated, JoAustralia was then tasked by Al Nouri on February 20, 2019 to find
retrocessionaires to cede the risk with a 10% retro fee to Al Koot.
10.3 JoAustralia confirmed that they worked with Seth Aklasi and Nana Dwomoh from Donewell on
the transaction. They also noted that Donewell provided the final wording as agreed in Ghana by
Cal Bank and ECG, which Al Koot signed and stamped.
10.4 JoAustralia confirmed that there is no written agreement between JoAustralia and Al Koot, but
there is a contract that was received by JoAustralia from Donewell, which was signed and
stamped by Al Koot. JoAustralia explained that, as an intermediary/broker, there wouldn’t
usually be a contract between them and the parties.
10.5 Regarding an executed an enforceable Demand Guarantee, JoAustralia stated that Donewell, as
the ceding company, issued the Demand Guarantees on their letterhead and attached a Cover
Note for the same terms and conditions from JoAustralia, which was signed and stamped by Al
Koot. JoAustralia further noted that the Demand Guarantees were stamped and signed by Al
Nouri, as the reinsurance manager, on behalf of Al Koot.
10.6 On March 27, 2019, JoAustralia sent a letter to Al Koot requesting that they confirm coverage.
JoAustralia noted that both Yayha Al Nouri, as well as Osman Hag Musa, were copied into the
email. However, there was no formal confirmation received, which is usually the practice. The
March 27, 2019 letter from JoAustralia to Al Koot contained "Premium Payment Terms” of 45
days from binding date. JoAustralia noted that this was the premium to be paid to the final
bearers of the risk, i.e., the retrocessionaires, and that Al Koot was only entitled to their 10% fee
and not entitled to premiums given they had requested that 100% of the risk be ceded. FTI was
shown swift transfers for the payments that JoAustralia made to the retrocessionaires for their
share of the premium in proportion to their respective exposure to the risk. It should be noted
that 15% of the risk was retroceded to Best Assurance Company Limited, a local Ghanaian
company, who confirmed directly to FTI their participation and receipt of the premium payment.
JoAustralia further stated that the only fee Al Koot is entitled to receive is the “fronting fees” of
10%, which was paid to them on their account through a Credit Note. In addition, any payments
between JoAustralia and Al Koot are done on accounts, either through Debit or Credit Notes, and
after reconciliation, payments are made against that account.
10.7 Regarding the July 16, 2019 letter from Al Koot to ECG where Hag Musa, amongst other things,
said the Demand Guarantees do not exist, officials from JoAustralia were very surprised that Hag
Musa or Al Koot would say such things, and further noted that the content of the letter “cannot
be true at all”. JoAustralia noted that “Al Koot may not take this type of risk, but on numerous
occasions they have taken this exact type of product on a retro basis.”
10.8 Regarding Al Nouri’s authority to sign technical documents, JoAustralia noted that they have
many deals signed by Al Nouri, sometimes alongside Hag Musa, sometimes by himself. They
stated that “Al Nouri has contracted with us on behalf of Al Koot for more than 30-40
transactions since 2017.”
10.9 On July 31, 2019, Hag Musa wrote a letter to JoAustralia instructing that they relieve the
retrocessionaires, which JoAustralia did. However, JoAustralia noted that they informed Hag
Musa that the Demand Guarantees cannot be cancelled. The action of canceling the retro caused
a premium refund from the retrocessionaires in the amount of USD2,252,269.60, which was the
premium for 214 days (from July 31, 2019 to March 1, 2020). This refund was passed on by
JoAustralia to Al Koot through Credit Note 843-2019. In addition, the retro fee of USD451,701.25,
which was initially credited to Al Koot, was also prorated, with JoAustralia debiting Al Koot for
USD264,109.47 for the remaining 214 days. 17 As of now, there are no retrocessionaires and Al
Koot is the sole bearer of the risk for the remainder of the coverage period. Furthermore,
JoAustralia is of the view that Al Koot cannot cancel this contract as stipulated in the contract.
However, Al Koot can, if they provide written notice 90 days prior to the expiration of the
contract, state that they do not want to extend the cover beyond March 1, 2020.
10.10 JoAustralia confirmed that they have met Hag Musa, as he is a representative of Al Koot.
JoAustralia also confirmed that they have seen Hag Musa sign trade risk guarantees alongside
Yahya Al Nouri. The deal would later be retroceded as earlier explained.
Activities in Qatar
11. K&L Gates, who assisted FTI with this investigation, met with officials 18 from Al Koot to discuss the PDS
Demand Guarantees. The Al Koot team started by refusing to identify their names and roles within the
company. Two individuals left the meeting room when K&L informed them that they needed to know the
names and roles of the individuals present.
12. During K&L’s interview with Al Koot on August 25, 2019, they confirmed that both the March 13, 2019
and July 16, 2019 came from individuals at Al Koot. They, however, confirmed the assertions in the July
16, 2019 letter written by Osman Hag Musa. They stated that Yahya Al Nouri did not have authorization to
execute the demand guarantees on behalf of Al Koot, and that such an amount would have required
board approval. They further confirmed that Demand Guarantees are not part of Al Koot’s product line.
13. Officials from Al Koot stated that Al Nouri is currently under suspension pending the outcome of an
internal investigation, which is scheduled to be completed by the second week of September 2019. They
17 Al Koot is now no longer the retrocedent, but rather the main reinsurer (carrying 100% of the risk), and hence is not entitled
to the 10% fee.
18 K&L met with Rahul Kumar, Legal; Mauricio Barmola, Internal Audit; and Shawqi Khalil, Claims.
also noted that everyone in the reinsurance department, including Hag Musa and management, are out
on vacation and would be back to the office starting September 1, 2019.
14. K&L could not obtain a copy of Al Koot’s Insurance License as this information is not publicly available, and
when K&L then requested from Al Koot a copy of the insurance license during the meeting, the officials
from Al Koot declined to provide it. Rather, they insisted that we make a written request to them of all
information that we would like to receive, and they will consider it internally.
K&L was, however, able to obtain a copy of Al Koot’s Articles of Association (“AoA”), and an extract of
their Commercial Registration (“CR”). Al Koot’s Commercial Registration indicates that Al Koot is
permitted to carry out all kinds of insurance activities, with the exception of life insurance. However, Al
Koot’s AoA are silent on whether Al Koot can reinsure demand guarantees. Nevertheless, under Article 13
of the AoA, Al Koot is permitted to work with other companies as long as the nature of the work is within
Al Koot’s objectives, as listed in the AoA. Al Koot’s core objectives are:
• insurance against fire;

• insurance against accidents;
• marine sea and air insurance;
• insurance against death and personal accidents;
• health insurance and medical care insurance; and
• insurance against political risks.
During K&L’s interview of Al Koot’s officials, Al Koot’s representatives stated that Al Nouri was only
authorized to sign technical documents up to the value of QR200,000. Al Koot’s officials also confirmed
that the stamp that was applied to the demand guarantees were that of Al Koot’s.
15. Regarding the validity of an unauthorized contact that is executed by an employee who does not possess
the appropriate authority, K&L notes that it may be possible to rely upon Article 209 of the Qatari Civil
Law. This provision provides that an employer is responsible for the damage caused by its employee’s
wrongdoing so long as such wrongdoing took place while the employee was performing his job. To
provide conclusive advice on the applicability of this provision, K&L would need to obtain a very detailed
understanding of the circumstances of the negotiations, discussions and execution of the Guarantees.
Importantly, however, K&L has informed us that the laws operating in Qatar are still untested in many
ways, many aspects of the laws of Qatar are not fixed rules that can be applied to the facts in order to
predict with certainty the judgment of a court on any application, the laws in Qatar frequently give wide
discretionary powers to administrative authorities, and there is no doctrine of binding precedent in Qatar
(so it is not possible to predict with any certainty what decision a court would take on any given issue in
the future).
16. Regarding whether the signatory (Al Nouri) who executed the Demand Guarantees on behalf of Al Koot
was duly authorized to make them or otherwise had the authority, real or apparent, to bind Al Koot under
Qatari law, K&L notes that regarding:
16.1 Real Authority
“Based on our review of the Documents, AlKoot’s AoA and CR, it does not seem that Mr. Nouri
was authorized to execute the Guarantees. Although the Technical Documents Authority List
includes Mr. Nouri as an authorized signatory to technical documents, it fails to define or detail
what is meant by ‘technical documents’.
During the meeting of 25 August 2019, we raised the question of whether Mr. Nouri was ever an
authorized signatory within Al Koot, and we were informed that Mr. Nouri was only authorized to
sign technical documents up to a value of QR200,000. Al Koot’s officials indicated that they may
be in a position to provide to us their internal signatory matrix upon a written request, as
explained in paragraph 3.1 above. 19
16.2 Apparent/Due Authority
In the absence of express provisions set out in a company’s CR, articles of association or board or
shareholder resolutions, there are certain provisions under Qatari law which create apparent, due
or ostensible authority in limited circumstances which do not apply to matters subject to the
Investigation.
Furthermore, Articles 81 to 90 of Law No. 22 of 2004 promulgating the civil code (the “Civil Law”)
deal with authority and agency issues regarding entering into contracts in general. While there
are no provisions in local law that set out the concept and doctrine of apparent or due authority
that helps the Investigation, there is some case law which suggests that such authority may be
recognized in very limited circumstances by the Qatari courts.
The requirements and/or conditions for the courts to apply this doctrine are difficult to establish
in a concrete manner as they are totally based upon the circumstances surrounding the matter in
question and the discretion of the court.
In a Cassation Court judgment, the court ruled (in case no. 72/2011) in favor of a party, who in
good faith, entered into a transaction which was executed by an unauthorized individual of the
other party. In that case, the Cassation Court held that an employee who fraudulently submitted
a purchase order with company stamps placed upon it and in circumstances where she indicated
that she was representing her employer, this was sufficient to give rise to the doctrine of
apparent authority. Therefore, the employer in that case was held liable for honoring the
obligations entered into by the delinquent employee.
As such and based on the current information we have, it is difficult for us to determine whether
or not Mr. Nouri had apparent/due authority to bind Al Koot. We would need separate and
further analysis to determine such a possibility.”
17. On August 29, 2019, the MiDA board Ad Hoc Special Committee provided us with documents which we
understand Al Koot produced to the GoG delegation that traveled to Qatar. We have not performed any
procedures to validate the authenticity of the documents, however, we do not have any additional
information to suggest that the documents cannot be relied upon. To that effect, we note the following
observations:
19 Refer to paragraph 14
17.1 Based on our review of Section 8 of Al Koot’s Delegation of Authority, Al Nouri does not have the
authority to bind Al Koot in relation to the Demand Guarantee without the Board’s approval,
which we have not seen as part of the executed PDS transaction documents.
17.2 Based on our review of Al Koot’s Underwriting Guidelines, 20 Page 22 states, amongst other
things, that Al Koot would “avoid” coverage of “guarantees”, and product warranty and quality.
20 Underwriting Guidelines, General Insurance Department, 2018-2019
Conclusions
Based on our review of background documents, interviews conducted, and independent investigative analysis
performed to date, FTI concludes the following:
1. The Payment Securities that were presented by Cal Bank and PDS to MiDA on February 27, 2019, which
were subsequently accepted by the Ministry of Finance and ECG, are compliant with the
recommendations contained in URDG 758.
2. We have not seen any documents that would suggest that, as of March 1, 2019, PDS, Cal Bank, Donewell
and/or personnel from MiDA should have questioned the validity of the Payment Securities. We further
note that officials from Al Koot confirmed to K&L that the stamp applied on the Acknowledgement and
Agreement page of the Payment Securities is that of Al Koot. They further confirmed that the signatures
are that of Al Nouri and Fadi, who are employees of Al Koot.
However, given that ECG is the beneficiary of the Payment Security, they sought guidance from GoG’s
Financial Advisers on what the best protocol would be to confirm the authenticity of the Demand
Guarantees. We further understand that Hunton advised ECG to contact Al Koot directly using contact
details other than those contained in the Demand Guarantees to obtain confirmation directly from Al
Koot that the demand guarantees were genuine and were validly issued.
3. Based on our review of Section 8. of Al Koot’s Delegation of Authority, which was produced by Al Koot to
GoG, Al Nouri does not have the authority to bind Al Koot in relation to the Demand Guarantee without
the Board’s approval, which we have not seen as part of the executed PDS transaction documents.
However, as noted in K&L’s legal analysis to FTI, in a Cassation Court judgment, the court ruled (in case
no. 72/2011) in favor of a party who, in good faith, entered into a transaction which was executed by an
unauthorized individual of the other party. In that case, the Cassation Court held that the doctrine of
apparent authority applied where an employee fraudulently submitted a purchase order with company
stamps in circumstances where she indicated that she was representing her employer. Therefore, the
employer in that case was held liable for honoring the obligations entered into by the delinquent
employee.
While this case may provide a basis to proceed in a lawsuit against Al Koot, it should be noted that K&L
stated that it is difficult for K&L to determine whether or not Al Nouri had apparent/due authority to bind
Al Koot. They would need to do a separate and further analysis to make this determination.
4. The Technical Documents Authority List, which includes Al Nouri as an authorized signatory to technical
documents, provides corroboration that Al Nouri had the authority, but unfortunately this document fails
to define or detail what is meant by technical documents. Therefore, it does not provide definitive proof
of Al Nouri’s authority to execute the guarantees.
5. The structural changes made to the original form of the Payment Securities as contemplated in the LAA
and BSA were approved by the MiDA board, an action that was in line with the prior instructions given by
His Excellency the Vice President to authorize PDS to issue the guarantees.
6. PDS could not secure the Demand Guarantees or Letters of Credit as per the requirements of the LAA and
the BSA from a bank because of three “main” challenges:
• PURC’s delay in approving the Rate Setting Guidelines and the initial rates that PDS was
authorized to charge;
• The delay in agreeing on the list of PPAs made; and
• PDS not having a certain level of capital required for the issuance of a cash backed Payment
Security.
7. Of the USD12.25 Million that was charged by Cal Bank to PDS as fees for raising the Payment Securities,
only USD1 Million (8%) was funded by an equity contribution by a PDS shareholder. USD7 Million (57%)
was funded by a loan that was advanced by Cal Bank to another PDS shareholder. This loan was repaid
from operating cashflows generated by PDS after the Transfer Date. The balance of USD4.25 Million (35%)
was also paid directly from operating cashflows generated by PDS after the Transfer Date.
8. We were unable to independently obtain Al Koot’s insurance license and officials from Al Koot refused to
produce it when K&L requested it during their meeting. As such, we do not know contents of the license,
and are unable to determine if, as a general matter, Al Koot is permitted by its license to reinsure a
portion of the risks assumed by a primary insurer under a demand guarantee governed by the Uniform
Rules for Demand Guarantee.
9. Based on our review of Al Koot’s Underwriting Guidelines, Page 22 states, amongst other things, that Al
Koot would avoid coverage of guarantees, and product warranty and quality.
Al Koot’s Articles of Association are silent on whether or not Al Koot is permitted to reinsure a portion of
risks assumed by a primary insurer under a demand guarantee governed by the Uniform Rules for
Demand Guarantee or by other rules. In addition, K&L confirmed that pursuant to Article 13 of the
Articles of Association, Al Koot is permitted to work with other companies as long as the nature of the
work is within Al Koot’s objectives, as listed in the Articles of Association.
10. It appears that personnel from Al Koot’s reinsurance department previously engaged in transactions that
are similar to the PDS Guarantees. These transactions, which leveraged the strength of Al Koot’s credit
rating, were brokered by JoAustralia, and reinsured by Al Koot, with further instructions by Al Koot to
JoAustralia to retrocede them to other reinsurers. Based on an arrangement with JoAustralia, a 10% fee
was credited back to Al Koot in these types of transactions. In the case of the PDS Guarantees, FTI
confirmed that 15% was retroceded back to a local Ghanaian insurance company. Thus, it appears that Al
Koot acted in the manner that would be expected if the demand guarantees that were issued were valid.
11. We have not identified any information to suggest that either PDS, Cal Bank, Donewell and/or personnel
from MiDA committed or conspired to commit fraud or other malfeasance in relation to the demand
guarantees.
Terms of Reference
Questions
Terms of Reference Response Outline
1. What process was adopted in procuring the PDS Demand Guarantees?
• On January 21, 2019, PDS formally requested the support of Cal Bank as its primary Bankers to arrange
and issue two separate Demand Guarantees to fulfill the requirement of the Transaction Agreements.
Given the compressed timeline to meet the revised February 1, 2019 Transfer Date deadline, Cal Bank
advised PDS on an alternative structure involving Demand Guarantees that would be issued by an
insurance company.
• On January 21, 2019, Cal Bank arranged for a meeting between themselves, PDS, and Donewell to
discuss the alternative structure.
• On February 4, 2019 there was an informal MiDA Board meeting where the GoG’s Financial Advisors
discussed the key risks with the proposed structure. We understand that, at the informal board
meeting, the represented MiDA board members accepted the structure in principle and charged the
Stakeholders to work with PDS and Cal Bank to agree on the text of the Demand Guarantees.
• The GoG Financial Advisors worked on the risk mitigation plan as presented to the MiDA board on
February 4, 2019.
• The structural changes made to the original form of the Payment Securities as contemplated in the LAA
and BSA were approved by the MiDA board on February 21, 2019, an action that was in line with the
prior instructions given by His Excellency the Vice President on February 19, 2019 to authorize PDS to
issue the guarantees.
• Based on Donewell’s request, JoAustralia approached Al Koot’s Reinsurance Department (like they
would with any other deal). JoAustralia discussed the deal with Al Nouri in his capacity as reinsurance
manager. Initially, Al Nouri was not willing to take the risk under their net-account but due to the “low
risk and good fees”, Al Nouri agreed to take this deal on a retro-basis. Once the deal was consummated,
JoAustralia was then tasked by Al Nouri on February 20, 2019 to find retrocessionaires to cede the
insurance risk with a 10% retro fee to Al Koot.
• On February 27, 2019, Cal Bank and PDS presented to MiDA a hard copy of the final version of the
Demand Guarantees.
• On February 27, 2019, a scanned copy of the Demand Guarantees was sent by MiDA via email to the
Ministry of Finance, copying the Chairman of ECG.
• On February 28, 2019, via a letter to the Honorable Minister of Finance and Honorable Minister of
Justice and Attorney General, ECG confirmed their acceptance of the Demand Guarantees. It should,
however, be noted that, on the same day, ECG wrote several letters, where they registered their
reservations about the structure of the Demand Guarantees, which they said did not conform to the
structure agreed to in the LAA and BSA.
• We further understand that officials from ECG asked GoG’s Financial Advisers on what the best protocol
would be to confirm the authenticity of the guarantees, given they were signed by a manager from Al
Koot, and that initial research that they had conducted revealed that the value of the amount reinsured
by Al Koot was too much of an exposure for them based on a review of their balance sheet. We further
understand that one of the Financial Advisers, Hunton Andrews Kurth (“Hunton”), advised ECG to
contact Al Koot directly using contact details other than those that were contained in the Demand
Guarantees to obtain confirmation directly from Al Koot that the demand guarantees were genuine and
were validly issued.
2. Was the process of procuring the PDS Demand Guarantees compliant with the standard procedure for
procuring such Demand Guarantees?
• The Ghana NIC confirmed directly to FTI that Donewell sought the necessary regulatory approval with
respect to the issuance of the PDS Demand Guarantees. We also received supporting documents from
Donewell which we confirmed with the NIC.
3. Whether Al Koot was approached by Jo Australia or Donewell Insurance to act as Re- Insurer in the PDS
deal?
• According to JoAustralia, based on Donewell’s request, JoAustralia approached Al Koot’s Reinsurance

Department (like they would with any other deal). JoAustralia discussed the deal with Al Nouri in his
capacity as reinsurance manager.
4. What was Al Koot’s response?

• According to JoAustralia, initially, Al Nouri was not willing to take the risk under their net-account but
due to the “low risk and good fees”, Al Nouri agreed to take this deal on a retro-basis. Once the deal
was consummated, JoAustralia was then tasked by Al Nouri on February 20, 2019 to find
retrocessionaires to cede the insurance risk with a 10% retro fee to Al Koot.
5. Who is the official(s) with whom communications were carried out in relation to the re-insurance?
• Cal Bank - Justina Laing, Group Head Corporate
• Donewell - Seth Aklasi, CEO and Nana Dwomoh
• JoAustralia - Micheal Ennab, Reinsurance Manager
• Al Koot – Yahya Al Nouri, Reinsurance Manager
6. What is the status of the person(s) with whom the communications were carried out?
• Cal Bank - Justina Laing, Group Head Corporate (Active)
• Donewell - Seth Aklasi, CEO (Active) and Nana Dwomoh (Active)
• JoAustralia - Micheal Ennab, Reinsurance Manager (Active)
• Al Koot – Yahya Al Nouri, Reinsurance Manager (Suspended based on a July 21, 2019 Letter from Al
Koot’s Chief Support Officer)
7. Was there an executed Demand Guarantee by Al Koot?

• There is a USD350 Million Demand Guarantee that was executed by Donewell. 95% of the Demand
Guarantee was reinsured by Al Koot and signed for by Yahya Al Nouri and Fadi Darghouth.*
8. Which law governs the Demand Guarantees executed on behalf of Al Koot?

• Laws of Ghana
9. Who was the official from Al Koot who signed the Demand Guarantee?
• Yahya Al Nouri
10. Was there an insurance premium and if so to whom was it paid?
• Cal Bank charged an all- in fee of 3.50% for advising on the issuance of the Demand Guarantee. For the
USD350 Million Demand Guarantees, the total fees paid to Cal Bank were USD12.25 Million. Of this USD
12.25 Million, USD7 Million was paid to Donewell for the cost of the insurance premium, while USD4.25
Million was retained by Cal Bank.
• We confirmed with the relevant government agencies that Donewell paid the required withholding tax
(5%) and NIC levy (1.5%).
• The total insurance premium of USD7 Million was posted to Donewell’s Cal Bank account on February
27, 2019. As reported by Donewell, a portion of this amount was distributed to four local Ghanaian
reinsurers and JoAustralia (the reinsurance broker)
11. When was the insurance premium paid?

• The total insurance premium of USD7 Million was posted to Donewell’s Cal Bank account on February
27, 2019.
12. Through which bank(s) was the insurance premium paid?

• Cal Bank
13. What are the particulars of the payment?

• Cal Bank Statement for Donewell - Ref # 19058466JS\BNK
14. Whether or not Al Koot is licensed to underwrite trade risks?

• We were unable to independently obtain Al Koot’s insurance license and officials from Al Koot refused
to produce it when K&L requested it during their meeting. As such, we do not know contents of the
license, and are unable to determine if, as a general matter, Al Koot is permitted by its license to
underwrite trade risk.
• Based on our review of Al Koot’s Underwriting Guidelines as produced by GoG, Page 22 states, amongst
other things, that Al Koot would avoid coverage of guarantees, and product warranty and quality, but it
does not specifically mention “trade risk”.
15. Whether a copy of the insurance license that the Central Bank of Qatar issued to Al Koot can be obtained
without contacting it?
• K&L has advised FTI that insurance licenses issued by the Central Bank of Qatar are not available to the
public. As such, they were not able to obtain a copy of Al Koot’s insurance license. Please note that K&L
asked for a copy of Al Koot’s insurance license during the meeting with Al Koot, but they declined to
provide it. However, they insisted that we make a written request to them of all information that we
would like to receive, and they will then consider this internally.
16. Whether a copy of Al Koot’s constitutional documents can be obtained without contacting it?
• K&L was able to obtain and review Al Koot’s Articles of Association from their official website.
Additionally, they were able to obtain a fresh copy of Al Koot’s Commercial Registration.
17. Whether Al Koot as a general matter is permitted by its license and constitutional documents to reinsure a
portion of the risks assumed by a primary insurer under a demand guarantee governed by the Uniform
Rules for Demand Guarantee.
• We were unable to independently obtain Al Koot’s insurance license and officials from Al Koot refused
to produce it when K&L requested it during their meeting. As such, we do not know contents of the
license, and are unable to determine if, as a general matter, Al Koot is permitted by its license to
reinsure a portion of the risks assumed by a primary insurer under a demand guarantee governed by
the Uniform Rules for Demand Guarantee.
• Based on our review of Al Koot’s Underwriting Guidelines as produced by GoG, Page 22 states, amongst
other things, that Al Koot would avoid coverage of guarantees, and product warranty and quality.
• K&L have not found evidence showing that Al Koot lacks the authority to enter into the demand
guarantees at issue here. Al Koot’s Articles of Association are silent on whether or not Al Koot is
permitted to reinsure a portion of risks assumed by a primary insurer under a demand guarantee
governed by the Uniform Rules for Demand Guarantee or by other rules. In addition, K&L confirmed
that pursuant to Article 13 of the Articles of Association, Al Koot is permitted to work with other
companies as long as the nature of the work is within Al Koot’s objectives, as listed in the Articles of
Association. Al Koot’s core objectives are:
• insurance against fire;
• insurance against accidents;
• marine sea and air insurance;
• insurance against death and personal accidents;
• health insurance and medical care insurance; and
• insurance against political risks.
18. Does Al Koot have a record of previously underwriting trade risks?

• We were unable to confirm this directly with Al Koot. However, during our discussions with JoAustralia,
we were shown transactional documents that suggest that Al Koot has a track record of underwriting
trade risk on a retro basis, which Al Koot has since denied by saying it is not part of their approved
product list.
19. Which persons are authorized to execute Demand Guarantees on behalf of Al Koot?
• Based on the review of Al Koot’s Delegation of Authority as produced by Al Koot to the GoG delegation
to Qatar, Section 8. “General Insurance Underwriting” – a reinsurance policy similar to that of PDS
would require the Chief Executive Officer “Endorsement” and Board “Approval.”
20. Is there a public registry where third parties could conduct a search and find out about the persons
authorized to execute the kind of guarantees in question?
• There is no such public registry in Qatar.
21. Whether the signatory (Al Nouri) who executed the demand guarantees on behalf of Al Koot was duly
authorized to make them or otherwise had the authority, real or apparent, to bind Al Koot under Qatari
law?
• Based on our review of Section 8. “General Insurance Underwriting” of Al Koot’s Delegation of

Authority, Al Nouri does not have the authority to bind Al Koot in relation to the Demand Guarantee
without the Board’s approval, which we have not seen as part of the executed PDS transaction
documents.
• However, as noted in K&L’s legal analysis to FTI, in a Cassation Court judgment, the court ruled (in case
no. 72/2011) in favor of a party who, in good faith, entered into a transaction which was executed by an
employee.
stated that it is difficult for K&L to determine whether or not Al Nouri had apparent/due authority to
bind Al Koot. They would need to do a separate and further analysis to make this determination.
22. Whether there was any disclosure made on the face of the Guarantee indicating the persons whose
signatures would bind the guarantor?
• No
23. What are the implications under Qatari law where an unauthorized person executes a guarantee in favour
of an innocent third party?
• As noted in K&L’s legal analysis to FTI, in a Cassation Court judgment, the court ruled (in case no.
72/2011) in favor of a party who, in good faith, entered into a transaction which was executed by an
employee.
24. Whether there is a ‘doctrine of due authority’ under Qatari law, and the relevant principles of that
doctrine?
• As noted by K&L, there are certain provisions under Qatari law which create apparent, due or ostensible
authority in limited circumstances which do not apply to matters subject to the Investigation.
Furthermore, Articles 81 to 90 of Law No. 22 of 2004 promulgating the civil code (the “Civil Law”) deal
with authority and agency issues regarding entering into contracts in general. While there are no
provisions in local law that set out the concept and doctrine of apparent or due authority that helps the
Investigation, there is some case law which suggests that such authority may be recognized in very
limited circumstances by the Qatari courts.
The requirements and/or conditions for the courts to apply this doctrine are difficult to establish in a
concrete manner as they are based upon the circumstances surrounding the matter in question and the
discretion of the court.
In a Cassation Court judgment, the court ruled (in case no. 72/2011) in favor of a party, who in good
faith, entered into a transaction which was executed by an unauthorized individual of the other party.
In that case, the Cassation Court held that an employee who fraudulently submitted a purchase order
with company stamps placed upon it and in circumstances where she indicated that she was
representing her employer, this was sufficient to give rise to the doctrine of apparent authority.
Therefore, the employer in that case was held liable for honoring the obligations entered into by the
delinquent employee.
25. If the signatory (Al Nouri) who executed the demand guarantees did not have authority to execute them,
whether to Jo Australia or Donewell knew or should have known that it did not have the authority required
to execute them?
• It has not come to our attention that Donewell knew or should have known that Al Nouri did not have
the authority required to execute the Demand Guarantees. We understand that Donewell did not deal
directly with Al Koot in the past and were never provided the delegation of authority.
• It has not come to our attention that JoAustralia knew or should have known that Al Nouri did not have
the authority required to execute the Demand Guarantees. JoAustralia stated that when they started
doing business with Al Koot in 2017, JoAustralia requested that Al Koot send them a list of staff that
were authorized to sign technical documents, as many of JoAustralia's clients were requesting this
information prior to dealing with Al Koot. In response to this request, JoAustralia stated that Yahya Al
Nouri sent them an email, copying Osman Hag Musa, and attaching a document with Hag Musa’s, Al
Nouri’s and Shawgi Khalil’s names that stated that, “The following staff are authorized to sign all
Technical documents of Al Koot.” JoAustralia confirmed that their understanding was that "Technical
Documents" referred to reinsurance contracts and related documents, hence there was no reason to
doubt Musa’s authority.
26. Was there an Agreement between Jo Australia and or Donewell and Al Koot as to the payment of Insurance
Premium?
• JoAustralia and Donewell – We have not seen any agreements.
• JoAustralia and Al Koot – We have not seen any agreements. We, however, understand from
JoAustralia that Al Koot charges a 10% retro fee for deals similar to that of the PDS Guarantee. Under
this arrangement, no premiums are due to Al Koot.
27. How much was the Insurance Premium agreed to by the parties?
• Donewell charged a 2% premium. Allocations of the premium were made based on the percentage of
risk that was ceded to the particular parties.
28. Whether Al Koot received the insurance premiums to which it was entitled?
• Based on our understanding of the structure that was used by Al Koot and JoAustralia, Al Koot was not
entitled to any premium, but rather a 10% retro fee, which was credited by JoAustralia to Al Koot.
• JoAustralia stated that the only fee Al Koot is entitled to receive is the “fronting fees” of 10%, which was
paid to them on their account through a Credit Note. In addition, any payments between JoAustralia
and Al Koot are done on accounts, either through Debit or Credit Notes, and after reconciliation,
payments are made against that account.
29. If Al Koot did not receive those premiums, who was paid, or is holding the premiums?
• Donewell paid JoAustralia the premiums. One of the retrocedent who is based in Ghana also confirmed
receipt of its portion of the premium payment.
30. Whether any of PDS, Cal Bank, Donewell, Jo Australia, or Al Koot committed or conspired to commit fraud
or other malfeasance in relation to the demand guarantees?
• We have not identified any information to suggest that either PDS, Cal Bank, Donewell and/or
personnel from MiDA committed or conspired to commit fraud or other malfeasance in relation to the
demand guarantees. Al Koot alleges that Al Nouri committed fraud and has provided evidence that an
investigation is being conducted, and that Al Nouri was suspended as a result of engaging in the alleged
fraudulent conduct.
31. If any of such organizations did commit or conspire to commit fraud or other malfeasance in relation to the
demand guarantees, which representatives of those organizations were involved in the scheme?
• Al Koot claims that Al Nouri engaged in a fraudulent scheme.
32. Was there any enforceable demand guarantee issued by Al Koot in place at any point over the last 5
months?
• The Payment Securities that were presented by Cal Bank and PDS to MiDA on February 27, 2019, which
were subsequently accepted by the Ministry of Finance and ECG, are compliant with the
recommendations contained in ICC’s Uniform Rules for Demand Guarantees.
• We further note that officials from Al Koot confirmed to K&L that the stamp applied on the
Acknowledgement and Agreement page of the Payment Securities is that of Al Koot. They further
confirmed that the signatures are that of Al Nouri and Fadi.
• As noted in K&L’s legal analysis to FTI, in a Cassation Court judgment, the court ruled (in case no.
72/2011) in favor of a party who, in good faith, entered into a transaction which was executed by an
employee.
33. Determine the authenticity of all the letters from Musa and the correctness of the facts and statements
contained in them.
• We believe that we have addressed in the previous sections of this document the two relevant
statements made in the Cancellation Letter: (i) that Al Koot does not underwrite counter party and
trade risk, and (ii) that Mr. Nouri does not have the authority to bind Al Koot in connection with the
Guarantees.
• Based upon our and K&L’s review and comparison of Musa’s specimen signature provided in the
banking mandate received, it appears that the signature reflected on the letter dated March 13, 2019,
allegedly sent by Mr. Musa as it bears his name as a sender, is not Musa’s signature. It appears that it
matches Mr. Nouri’s initials, which also appear on the lower right corner of the Guarantees. During
K&L’s meeting with Al Koot, they questioned the signature on the letter dated July 16, 2019, and Al
Koot’s officials informed us that this was not Musa’s signature.
34. Any other point(s) which may be relevant to the points raised above.
• None

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AUGUST 30, 2019

FINAL SUMMARY OF FINDINGS REPORT

FORENSIC AUDIT/INVESTIGATION INTO DEMAND GUARANTEES

AUGUST 30, 2018

A. Identification and Collection of Relevant Documents

i. Interviews Conducted by FTI

Interview Date Company Personnel Location

Interview Date Company Personnel Location

C. Business Intelligence Research: Background Research

2. Introduction of the Demand Guarantee issued by an insurance company.

3. Approval of the Demand Guarantee structure issued by an insurance company.

• A demand guarantee from an unrated insurer introduces additional complexity, resulting in

• Confirm the level of risk primary insurers will cede to reinsurers.

• Confirm identity and ability of reinsurers to pay.

• Confirm identity and ability of primary insurers to pay.”

“A guarantee may be advised to a beneficiary through an advising party. By advising a guarantee,

We did not receive a copy of these documents.

10. Regarding the PDS transaction, JoAustralia noted the following:

• insurance against fire;

16.1 Real Authority

16.2 Apparent/Due Authority

20 Underwriting Guidelines, General Insurance Department, 2018-2019

• The delay in agreeing on the list of PPAs made; and

• According to JoAustralia, based on Donewell’s request, JoAustralia approached Al Koot’s Reinsurance

4. What was Al Koot’s response?

• Cal Bank - Justina Laing, Group Head Corporate

• Donewell - Seth Aklasi, CEO and Nana Dwomoh

• JoAustralia - Micheal Ennab, Reinsurance Manager

• Al Koot – Yahya Al Nouri, Reinsurance Manager

• Donewell - Seth Aklasi, CEO (Active) and Nana Dwomoh (Active)

• JoAustralia - Micheal Ennab, Reinsurance Manager (Active)

7. Was there an executed Demand Guarantee by Al Koot?

8. Which law governs the Demand Guarantees executed on behalf of Al Koot?

11. When was the insurance premium paid?

12. Through which bank(s) was the insurance premium paid?

13. What are the particulars of the payment?

14. Whether or not Al Koot is licensed to underwrite trade risks?

• insurance against fire;

• insurance against accidents;

• marine sea and air insurance;

• insurance against death and personal accidents;

• health insurance and medical care insurance; and

• insurance against political risks.

18. Does Al Koot have a record of previously underwriting trade risks?

• There is no such public registry in Qatar.

• Based on our review of Section 8. “General Insurance Underwriting” of Al Koot’s Delegation of

• JoAustralia and Donewell – We have not seen any agreements.

• Al Koot claims that Al Nouri engaged in a fraudulent scheme.

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