Logistics and engineering firm, Engineers & Planners has ordered its bankers to pay $28 million to struggling state-owned bank Merchant Bank.

The amount, scheduled to be paid on December 20, 2013 will settle the firm’s indebtedness to the bank which has become a matter of public and political controversy.

Editor-In-Chief of the Crusading Guide Newspaper, Abdul Malik Kweku read documents on Joy FM and MultiTV’s news analysis programme, Newsfile, in which the order was given.

A letter signed by the CEO of E&P, Mr. Ibrahim Mahama, brother of President John Mahama, dated December 13, 2013 and addressed to Africa Export Import Bank asked that a Tranche One loan be used to defray the debt.

The letter read in part, “We wish to borrow a tranche one loan… [of $28 million]…on a proposed utilization date of 20 December 2013. The proceeds of this tranche one loan should be credited to Merchant Bank Ghana Ltd.”

The debt owed by E&P is said to constitute a chunk of the bad loans portfolio of Merchant Bank which has crippled the bank and necessitated its sale.

The debt took a political twist when a threat by Merchant Bank to go to court and retrieve the money owed it triggered a petition by lawyer for E&P, Tony Lithur to the president to intervene and “maintain the status quo ante.”

The petition leaked prompting suggestions that the president may have used his clout to influence the process in favour of his brother’s company – suggestions flatly rejected by the president.

Merchant Bank had refused to guarantee a loan from the Africa Export Import Bank, part of which would have been used to defray the $28 million debt which was reduced from $38 million to enable the company to pay.

E&P therefore went into another agreement with Access Bank to guarantee a loan of $72 million part of which will now be used to pay Merchant Bank’s debt.

Mr. Baako said the amount may not be enough to resuscitate the ailing bank whose sale to private equity firm, Fortiz has itself generated intense political debates with civil society organizations, labour unions and political parties demanding a suspension of the deal.

Some opposition MPs have called the deal fraudulent and called for its abrogation.

Six labour groups - the Trades Union Congress (TUC), Ghana National Association of Teachers (GNAT), National Association of Graduate Teachers (NAGRAT), Ghana Medical Association (GMA), Judicial Services Staff Association of Ghana and the Ghana Hospitals Pharmacists Association Friday jointly held a press conference and asked the Social Security and National Insurance Trust (SSNIT) Board and the Bank of Ghana to immediately suspend the transaction.

The Executive Director of the Centre for Freedom and Accuracy, Mr. Andrew Awuni is in court challenging the sale and arguing that other financial institutions made far better offers for the bank than Fortiz and yet Fortiz’s offer was accepted.

Mr. Awuni wants Merchant Bank, SSNIT, and the Central Bank to explain the reason for their choice of Fortiz as the firm to take over Merchant Bank.

It remains to be seen whether the settlement of E&P's debt will change the standing of the bank.