Home / Belstar denies wrongdoing in adb shares purchase

Belstar denies wrongdoing in adb shares purchase

BELSTAR Capital Limited has rejected claims of any wrongdoing in its purchase of shares in adb bank.

A statement from the company said claims suggesting that it acquired adb’s Initial Public Offering (IPO) using Bank of Ghana’s (BoG) emergency liquidity support obtained by uniBank and given to BELSTAR’s consortium in the form of a loan are “untrue.”

The Central Bank on Monday annulled the acquisition of shares in adb Bank held by four investors – Belstar capital, Starmount Development Company Limited, SIC Financial Services and EDC Investments Limited.

According to the BoG, the decision amongst others equally makes it impossible for them to carry out any voting rights as well as reduce the effectiveness of the directors appointed by the said investors.

This meant that Belstar Capital Limited (Belstar), Starmount Development Company Limited (Starmount), SIC-Financial Services Limited (SIC-FSL) and EDC Investments Limited (EDC) are no longer shareholders of adb.

The BoG 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.”

The four investors owned 51 percent of adb, which was listed on the Ghana Stock Exchange (GSE) in December 2016.

Bank of Ghana accused Belstar and Starmount of acquiring adb’s shares “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.”

BoG also insisted that “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,” hence its action.

But BELSTAR in its statement argued that at the time the IPO was being bought, the amount of fund available to uniBank exceeded the amount of money it (uniBank) loaned BELSTAR with.

“Whilst information available to BELSTAR confirms owing to a default in loan repayments to uniBank by key government-related entities, the bank had sought emergency liquidity support from BoG. The quantum of depositor’s funds available to uniBank at the time of the IPO far exceeded the amount of money loaned to BELSTAR to acquire the shares in ADB.”

“As borrowers, BELSTAR will not know the source of the money offered, but given what we know to be the state of affairs of the IPO, uniBank or any bank would rather lend the cheaper depositors fund of which they held 3 billion cedis as opposed to the emergency liquidity support of nearly 800 million cedis. We believe that the BoG statement is incorrect and regrettable,” the statement from BELSTAR added.

BELSTAR also denied any wrongdoing in acquiring majority of ADB shares.

“BELSTAR and its consortium are reputable business entities and are led by credible actors with years of experience in money market and financial transactions. We wish to say that we will take steps to correct the erroneous impression that the BoG has put out and use the appropriate channel to restore our business interest to encourage other private sector players to believe in the free market principles,” the statement added.

uniBank is currently being run by private audit firm KPMG Ghana following a directive by the Bank of Ghana.

This was after the BoG announced it has taken over the bank to prevent it from collapsing.


Source: citinewsroom.com

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