The Bank of Ghana (BoG) has been sued after it annulled shares of two companies in adb that eventually scuttled their moves to hand over controlling stake to a struggling bank, unibank.
Belstar Capital Ltd and Starmount Development Company Limited have in their statement of claim castigated the Central Bank for its July 17, 2018 announcement annulling their shares which they had pledged to surrender to unibank.
That BoG move, the plaintiffs have described as “arbitrary, capricious and inconsistent” as well as an unlawful interference in their business interests.
The Governor of BoG, Ernest Addison said Belstar and Starmount which had 24% and 11% shares respectively obtained it using funds from unibank which the bank obtained from BoG.
Unibank was on BoG’s ‘intensive care unit’ as its financial health deteriorated and the central bank suggested it was shocked that funds it had been pumping into unibank to boost its financial blood had been passed on to some shareholders at abd to take over adb.
In effect, BoG money was used to buy a bank which BoG was once a shareholder, a move which the central bank flagged down and explained the planned acquisition was without the regulator’s knowledge and approval as required by Section 49 of the Banks and Specialised Deposit-Taking Institutions Act 2016.
Less than a month after BoG quashed the takeover, the affected shareholders have gone to the Commercial Division of the Accra High Court in an unusual battle between the regulated and the regulator.
The victims of BoG “illegal” annullment are going to court armed with the Security Industry Act 2016 to show the judge that the Central Bank and the Central Securities Depository goofed.
Belstar and Starmount companies also revealed a grand scheme by government and the Central Bank to arm-twist the directors of adb into a merger with National Investment Bank when it does not have a controlling stake in adb to legally effect this merger.
The plaintiffs say the unlawful interference by the central bank was to make it easy for the Finance Minister, Ken Ofori-Atta have his way in getting adb to advance 10.45m cedis to a private company McDan Shipping.
This instruction from the Finance Minister to the Managing Director of adb was done with an explanation that the bank had no board and, therefore, remains under the minister’s oversight powers.
But the plaintiffs say this explanation is “erroneous” and “unlawful”. The two plaintiffs also accused BoG of ursurping the powers of the Securities and Exchange Commission which should be the body determining the legality or otherwise of the purported takeover.
Belstar and Starmount say BoG acted as a complainant in accusing them of using unibank money obtained from BoG to buy adb shares.
But a complainant, they said cannot constitute itself into a prosecutor and almost immediately into a judge and ‘rule’ that their agreement to give up shares to unibank is unlawful.
That is the work of SEC and since BoG has decided to take up that work “illegally”, the plaintiffs are asking the High court to tell BoG in the face that its actions are null and void.
They are asking for 12 reliefs including a order restraining Central Securities Depository Ltd from freezing the shares in adb and aslo restraining BoG from “unlawfully” interfering with their business.
They also want the court to declare as unlawful, a directive from BoG to the directors appointed by the plaintiffs ordering them to cease their work as directors.
But even before the case of BoG annulment of shares belonging to the two companies is called, unibank has given up the ghost as the bank no longer exist.
The bank that had planned to take over adb has been taken over by BoG and given off to Consolidated Bank Gh. Ltd – the place where struggling banks go to die as they are merged into one mega local bank.