Business News of 2014-05-23

SSNIT orders HFC, Republic bank to ceasefire

The Social Security and National Insurance Trust (SSNIT) has cautioned HFC bank and Republic Bank to cease the media warfare over the latter’s move to take over the bank.

The two banks for some months now have been at logger heads with each other over the takeover process. They have also accused each other of breaching the agreement reached on the takeover.

Republic bank earlier denied accusations made by HFC bank that it did not go through the right legal process in its takeover bid of the bank and also dismissed reports that it failed to go by the deal agreed between it and HFC bank on the takeover.

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

But the state pension fund manager SSNIT which is one of the largest shareholders in the bank and currently owns about 26 percent of shares in the bank has called for the two parties to ceasefire.

Its Director-General Ernest Thompson told Citi Business News his outfit has ordered that the two parties cease their battle in the media and rather focus on resolving the issues in the board room.

‘The only key decision taken is that everybody should just follow what the law says we have also stressed quietly to HFC and Republic bank and other shareholders that banks thrive on confidence so issues must be solved in the boardroom and not in the press and many other issues that have come out HFC can solve them in the boardroom and we have made that very clear to both parties. If both parties think things are not being done rightly they should go to court but not engage in media warfare’.

Early on there were reports that SSNIT and the regulator of the cocoa industry COCOBOD were likely to sell their shares in HFC bank to Republic bank. SSNIT currently owns about 26 percent of shares in the bank while COCOBOD has 5.57 percent.

Shares of COCOBOD and SSNIT will fetch the two institutions over 40 million dollars. But Ernest Thompson tells Citi Business News SSNIT has not as yet decided on whether or not to offload its stake in HFC bank.

‘We have not yet taken a decision on what we will do, there is a lot of analysis going on and before such a decision is taken we have to discuss it thoroughly and go through the process. So we are yet to take a decision but at the appropriate time we will take a decision’.

The share price of HFC on Thursday May 23, 2014 inched up by a pesewa, closing the day’s trade at 1cedi 34pesewas.

Industry watchers say it will be prudent for the deal to be quickly completed as the market price seems to be getting closer to the offer price of 1 cedi 60 pesewas. This they say might make the offer unattractive.