The Bank of Ghana has, with immediate effect, annulled the acquisition of ADB shares-held by four investors-and all transactions undertaken in respect of the relevant shares.
The affected investors are Belstar Capital, Starmount Development Company Limited, SIC Financial Services and EDC Investments Limited.
Accordingly, the exercise of any voting rights or any rights issue in respect of the shares by these investors as well as payment of any dividends in respect of these shares are also prohibited.
Also, directors appointed by Belstar, Starmount, SIC-FSL and EDC to the ADB Board are to cease holding themselves out as directors of ADB with immediate effect.
A statement from the central bank, on Monday, said that pursuant to section 55 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) it seeks to:
(i) Annul the acquisition by Belstar Capital Limited (Belstar), Starmount Development Company Limited (Starmount), SIC-Financial Services Limited (SIC-FSL), and EDC Investments Limited (EDC), of all shares held by them in the ADB Bank Limited (ADB), and all transactions undertaken in respect of the relevant shares;
(ii) Prohibit the exercise by Belstar, Starmount, SIC-FSL and EDC of any of the voting rights or any other rights in respect of the relevant shares; and
(iii) Prohibit the directors appointed by the parties specified above to the Board of the ADB from acting as directors of ADB.
According to the statement from Bank of Ghana, Belstar and Starmount are affiliates, and unknown to the central bank, entered into agreements with SIC-FSL and EDC to acquire additional shares in ADB in its IPO. These agreements, in addition to the direct acquisitions by Belstar and Starmount resulted in a direct and indirect holding by these companies of over 50% of the shares of ADB without the knowledge and approval of the Bank of Ghana and in breach of section 49 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
Secondly, the shares acquired by Belstar and Starmount were acquired with funds obtained from uniBank Ghana Limited-which is currently under official administration-using emergency liquidity support obtained by uniBank Ghana Limited from the Bank of Ghana in questionable circumstances. However, the liquidity funds obtained by uniBank were improperly and unlawfully on-lent to Belstar and Starmount to acquire shares (including shares held by the Financial Investment Trust on behalf of the Bank of Ghana) in ADB’s IPO.
The statement added that Belstar and Starmount are not “fit” and “proper” persons and cannot be permitted by the central bank to continue to hold shares acquired directly or indirectly in ADB. This is because, two investors are deemed to have participated in a series of other questionable, unsafe, and unsound related party transactions involving uniBank Ghana Limited to the detriment of Ghana’s financial system and for their financial gain and benefit.
The Bank of Ghana believes that the move by Belstar, Starmount, uniBank and the other mentioned investors manifest a calculated intention by these entities to act in concert to acquire a majority shareholding in ADB using EDC and SIC-FSL without the knowledge and approval of the Bank of Ghana.
“The Bank of Ghana, therefore in the exercise of its powers pursuant under sections 49 and 55 of Act 930, has with immediate effect annuled the acquisition by Belstar, Starmount, SIC-FSL, and EDC of all shares held by them in the ADB and all transactions undertaken in respect of these shares,” the statement read.
“All shares acquired by Belstar, Starmount, SIC-FSL and EDC in ADB which were previously held by the Financial Investment Trust are to be immediately restored to the Financial Investment Trust until further notice,” the statement concluded.