The controversy surrounding the Concession agreement signed on behalf of Government of Ghana by the Electricity Company of Ghana, with the Power Distribution Services Ghana Limited is likely to settle soon, as a United States-based consulting firm, FTI, clears PDS of any wrongdoing. According to the firm, which was contracted by the Millennium Development Authority (MiDA) to investigate the deal following claims of “fundamental and material breeches” by government, the insurance guarantees, which have become the subject matter were, indeed, paid to back the PDS’s takeover of the assets and operations of the ECG. A 32-page report submitted by FTI Consulting to MiDA, dated September 3, 2019, and signed by Pat Pericak and David Okhumal, both officials of the consulting firm, said: “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 Gates, a law firm in Qatar, 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 those of Al Nouri and Fadi Danghouth, who are employees of Al Koot.” The report disclosed in response to claims by Al Koot that the staff who signed the insurance guarantee did not have the authority to do so. However, the report also found out that “of the $12.25 million that was charged by Cal Bank to PDS as fees for raising the Payment Securities, only $1 million (8%) was funded by an equity contribution by a PDS shareholder; $7 million (57%) was funded by a loan that was advanced by Cal Bank to another PDS shareholder. This loan was repaid from operating cash flows generated by PDS after the transfer date. “The balance of $4.25 million (35%) was also paid directly from operating cash flows generated by PDS after the transfer date,” it said. It said based on reviews of background documents, interviews conducted and independent investigative analysis performed to date, 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 the ECG, were compliant with the recommendations contained in the Universal Rules for Demand Guarantees (URDG 758). FTI Report On whether or not the official of Al Koot, who signed the insurance guarantee had authority to do so, the FTI report said: “Based on our review of Section 8 of Al Koot’s Delegation of Authority, which was produced by Al Koot to the Government of Ghana, 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.” It further provided that despite the unfolding events from the corridors Al Koot might provide for a basis to proceed in a lawsuit against Al Koot, there was the need to do a separate and further analysis to make that determination. We produce to readers excerpts of the FTI Report 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 Danghouth, 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.

5. 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.
6. 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.
7. 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.

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 (EXHIBIT 1) and the Bulk Supply Agreement (EXHIBIT 2). 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 capital¹ 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 (EXHIBIT 3). 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 meeting² 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” (EXHIBIT 4). 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 We understand that no formal minutes were kept because the board did not have a quorum (Exhibit 5). 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. 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 copied on the email were the Minister of Finance and Chairman of ECG (EXHIBIT 6). 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 (EXHIBIT 7): “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. 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 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;” (EXHIBIT 8) 3.4 On February 27, 2019, Cal Bank and PDS presented to MiDA the final hard copy version of the Demand Guarantees (EXHIBIT 9). 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 copy⁵ 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 (EXHIBIT 10): “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. (EXHIBIT 11). It 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 (EXHIBIT 12).

• A letter to the Honorable Minister of Finance 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 (EXHIBIT 13).
• 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 (EXHIBIT 14). 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 (EXHIBIT 15):

“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 (EXHIBIT 16). 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.

6 We 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.   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” (EXHIBIT 17).

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” (EXHIBIT 18):

“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, 2019⁷ and February 21, 2019 (EXHIBIT 19), 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.

7 Refer to Exhibit 4 8 We 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. 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.⁸ 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. 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 (EXHIBIT 20).

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 USD5.25 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 Baron9	USD7 Million	February 26, 2019	Personal Loan Advanced by Cal Bank10
PDS	USD4.25 Million	May 17, 201911	PDS Operating Cashflows12
Total		USD12.25 Million

 

Company Name	Amount		Share		Comments
Amount Retained
Donewell	USD148,008		2.11440%		Primary Guarantor
Reinsurance Apportionment14
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	140,00015		2.00000%		Reinsurance Broker
Total Distribution		USD7,000,000		100.00000%

  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% (EXHIBIT 28). Activities in Jordan

8. We note, that during our interview with officials from JoAustralia¹⁷ 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 documents¹⁸ 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.” (EXHIBIT 29) 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 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 Bank and/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 (EXHIBIT 30). 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 (EXHIBIT 31). 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 (EXHIBIT 32), 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 (EXHIBIT 33). 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.¹⁹ 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. 19 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. 20 K&L met with Rahul Kumar, Legal; Mauricio Barmola, Internal Audit; and Shawqi Khalil, Claims. Activities in Qatar

11. K&L Gates, who assisted FTI with this investigation, met with officials²⁰ 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 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”) (EXHIBIT 34), and an extract of their Commercial Registration (“CR”) (EXHIBIT 35). 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 contract 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.²¹ 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:

17.1 Based on our review of Section 8 of Al Koot’s Delegation of Authority (EXHIBIT 36), 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 (EXHIBIT 37),²² Page 22 states, amongst other things, that Al Koot would “avoid” coverage of “guarantees”, and product warranty and quality.