Bank of Ghana revokes purchase of shares in ADB
The Bank of Ghana has revoked the purchase of shares in ADB.
This means that Belstar Capital, EDC Limited, Starmount Limited and SIC-Financial Services are no longer shareholders of ADB.
By this ownership of the bank automatically reverts to the government
of Ghana and Bank of Ghana through the Financial Investment Trust.
A statement issued by the Bank of Ghana on Monday evening said: "Belstar
and Starmount are not fit and proper persons and cannot permit them to
continue to hold shares acquired directly or indirectly in ADB."
Below is a copy of the BoG statement
BANK OF GHANA ANNULS THE ACQUISITION OF SHARES OF ADB BANK LIMITED HELD BY BELSTAR CAPITAL LIMITED, STARMOUNT DEVELOPMENT COMPANY LIMITED, SIC-FINANCIAL SERVICES LIMITED, AND EDC INVESTMENTS LIMITED
The Bank of Ghana has today made an Order pursuant to section 55 of
the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act
930) 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.
The Order takes immediate effect.
Following the Initial Public Offering (IPO) undertaken in respect of
ADB in 2016, Belstar and Starmount directly acquired 24% and 11%
respectively of issued shares in ADB.
It has come to the notice of the Bank of Ghana that Belstar and Starmount are affiliates, and
unknown to the Bank of Ghana, they 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).
It has also come to the notice of the Bank of Ghana that the shares
acquired by Belstar and Starmount were acquired with funds obtained from
uniBank Ghana Limited
(currently in 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.
Belstar and Starmount 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 considers that Belstar and Starmount are not fit
and proper persons and cannot permit them to continue to hold shares
acquired directly or indirectly in ADB.
The request for emergency liquidity support from the Bank of Ghana by
uniBank, loans from uniBank to Belstar and Starmount, the loan from
Belstar to SIC-FSL, provision of funds to, and the engagement of EDC by
Starmount as purchaser and trustee of shares, are inextricably linked
and 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 exercise of any of the voting rights or any rights issue in
respect of the shares by Belstar, Starmount, SIC-FSL, and EDC and the
payment of any dividends in respect of these shares are also prohibited.
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. All 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.
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