Business News of 2014-05-16

Republic Bank denies breaching HFC contract

Republic bank has denied accusations made by HFC bank that it did not go through the right legal process in its takeover bid of the bank.

The bank has also dismissed reports that it failed to go by the deal agreed between it and HFC bank on the takeover.

HFC bank in its recent reaction to the takeover accused Republic bank of going contrary to the deal agreed by both parties on the takeover bid and also not going through the right process.

HFC bank has sworn to take appropriate steps to ensure that Republic bank complies with the applicable legal and regulatory requirements under Ghanaian law.

According to HFC bank the process adopted by Republic bank in its takeover bid of the bank is against the collaborative time agreed between the two parties.

In a press statement from HFC bank signed by the bank’s company secretary it stated that after receipt of conditional letters from the Bank of Ghana (BoG) Republic bank and its agents were written to hold onto any planned action whilst a clarification of the conditions and the process was sought to ensure that the appropriate process was adhered to particularly as Republic bank itself had concerns with the communiqué from the central bank.

But a press statement from Republic bank denied the accusations.

According to Republic bank since its ‘initial entry into Ghana in November 2012, it has consistently attempted to adhere to the rules and regulations laid down by the Bank of Ghana and the Ghana Securities and Exchange Commission and where there has been ambiguity, it has sought clarification and guidance from its advisors in Ghana and the regulatory authorities’.

Reacting to the accusation from HFC bank that it went against the collaborative time agreed between the two parties Republic bank said ‘in November of 2012, Republic Bank Limited and HFC Bank agreed to the framework for the investment by Republic Bank in HFC Bank. The agreement, signed on 6th November, 2012, provided that Republic bank would not increase its shareholding in HFC Bank beyond 40% for a period of one year without the prior approval of the Board of Directors. Both parties recognized that the mandatory takeover code would be triggered if Republic acquired over 30% during the one year period and that the process would have to be followed if SEC’s approval was not obtained for a waiver’.

It further stated that ‘Republic has always maintained the position that the mandatory offer requirement is a legal one which cannot be set aside simply by an agreement between the relevant company and a shareholder’.

According to Republic Bank it ‘values all relationships and strategic partnerships that they enter into, however, at no time will the value of those relationships supersede the laws in the countries in which they are operating’.

Republic Bank says it will ‘at all times seek to work with regulatory authorities and act in compliance with the laws of Ghana.