Business News of 2013-12-03

Awuni withdraws suit against sale of Merchant Bank

Andrew Awuni, Executive Director of Centre for Freedom and Accuracy, has “instructed” his solicitors to discontinue his suit against the sale of Merchant Bank to private equity fund, Fortiz, at the Fast Track High Court.

The Centre wanted the transaction giving away 90 percent shares of the bank for 90 million Ghana cedis to Fortiz abrogated. It also prayed the court to place an injunction on the deal it claimed was not giving the country value for money.

When the case was called on Thursday, 28th November 2013 at an Accra Fast Track High Court, it was adjourned to December 5.

Even before the parties go back to court on the adjourned date, lawyer for the Centre for Freedom and Accuracy, Egbert Faibille confirmed to Joy News, Monday, that he has been instructed to stop pursuing the case at the Fast Track High Court.

However, he disclosed to Joy News that the case would now be fought at the Commercial Division of the High Court. They have also gone to court to place an injunction on the sale again.

The lawyer said his client would now be seeking reliefs against 13 persons including the Merchant Bank, Social Security and National Insurance Trust, Bank of Ghana, Fortiz and KPMG as first, second, third, fourth and fifth defendants respectively. The rest are one time directors of the board of Merchant Bank.

He explained that the directive from his client to discontinue the case at the Fast Track Court was based on “certain considerations”.

The new case would be called on 10th December.

Mr Faibille said it is clear under Article 296 of the 1992 Constitution of Ghana that any person whom discretionary power is vested should exercise it on fair and candid grounds.

The court is therefore being asked to examine whether the considerations which went into the deal were “fair and candid” to the interest of SSNIT contributors which included Mr Andrew Awuni.

If the court rules that the transaction was "not made in a fair manner, so be it,” Egbert Faibille said.

“The decision by Bank of Ghana to give its approval to the [sale] is also obviously not based on fair and candid lines and so same must be set aside,” he demanded.

He said his client wants transaction advisors KPMG to explain how they valued 90 per cent shares for 90 million cedis.

He defended the decision to add Merchant Bank to the suit, arguing that the bank "ought to be seen taking prudent steps to protect its members".

Mr Faibille revealed that the whole SSPA - shares, subscription, and purchase agreement - has been executed between SSNIT and Fortiz and claimed the Bank of Ghana is now asking that the SSPA is amended.

Signing the SSPA, he explained, means SSNIT can transfer to Fortiz shares it has acquired in the bank which ought to be filed at the Registrar General so that anyone who wants to do due diligence on the company would be able to trace it.

He pointed out: “This injunction we are seeking which will come on 10th of December is to prevent SSNIT or Fortiz from executing any document by which they would transfer the shares that have been sold to Fortiz.”