The Ghana Stock Exchange (GSE) has suspended the Agricultural Development Bank (adb) following a purported takeover of the bank by Unibank.
A statement from the GSE said the action was taken pursuant to section 7 of the GSE Automated Trading rules.
“With reference to Section 7 of the GSE Automated Trading Rules (ATS), the Managing Director of the Ghana Stock Exchange (GSE), in consultation with the Chairman of the GSE Council has suspended trading in the shares of ADB effective March 7, 2018.”“We are taking this action so that ADB provides full information and clarity on the matter including whether the purported take-over complies with the Securities and Exchange Commission and the Bank of Ghana requirements,” the statement GSE added.
Unibank has confirmed to Newsmen that it has gone into a transaction with four major shareholders of Agricultural Development Bank (adb), that has effectively given them majority control of the state bank.
It says the move follows the pledging of shares and voting rights of the consortium of shareholders in adb Bank.
Belstar Capital, Starmount Development company, EDC as well as SIC Financial Services Limited, have all pledged their shares, proceeds, entitlement and voting rights to Unibank.
It is still unclear what informed the decision of the shareholders.
But speaking on the Citi Breakfast Show on Wednesday, the CEO of Unibank, Dr. Kwabena Duffour Jr. said the plan is in the best interest of the banking industry.
“For now, we have the power and control to change it from adb. Down the line we might decide to do a proper transfer where we will need the approval of the various regulatory bodies but for now we have the power and control over it,” he added.
Dr. Duffour Jr however failed to give further details on how they managed to secure the deal in adb saying “I’m not at liberty to discuss the underlining transaction.”
Although the state of affairs now does not constitute a takeover of adb by Unibank, this comes on the back of the takeover of UT and Capital banks by GCB bank in 2017.
The Bank of Ghana gave GCB bank the permission to purchase the two banks because they were unable to increase the capital requirements needed for their banking operations.
With the latest development, it is unclear what happens to government’s intention of merging state banks adb and the National Investment Bank (NIB), as announced by the Finance Minister in the 2018 budget statement presented to Parliament.
adb IPO row
The adb bank commenced its Initial Public Offer (IPO) in July 3, 2015.
Prior to that the bank was forced to put the IPO on hold several times following some agitations from the workers and some Ghanaians.
The Member of Parliament for the New Juaben South constituency, Dr. Mark Assibey-Yeboah also dragged the bank to the Supreme Court insisting that the Bank’s IPO should first be approved by parliament.