Bank of Ghana, UniBank lock horns over ADB takeover

The fate of Ghana’s only agriculture centred Bank, Agriculture Development Bank (ADB) is still left hanging as government, Bank of Ghana, uniBank all appear to have different plan to resuscitate the struggling financial institution.

Government’s plan for ADB

Late Last year (November 2017), Finance Minister, Ken Ofori-Atta, during the 2018 budget presentation hinted of a possible merger between National Investment Bank (NIB) and the Agricultural Development Bank (ADB) to form the National Development Bank.

At a post-budget forum, the Minister rehashed government’s plan for the bank stating that a merger of the two publicly owned banks could help create a development-oriented bank that can then finance the government's vision of transforming the economy through increased investments in agriculture and industrialisation.

The central bank at the time endorsed plans by the government to merge the operations of ADB and the National Investment Bank (NIB) to meet the new GHS400 million minimum capital requirement.

But reports coming in today (March 7, 2018) are telling a different story.

uniBank takes over ADB

Starr FM online, a subsidiary of the Excellence In Broadcast (EIB) Network, a media group owned by owners of UniBank reported that a consortium of financial institutions that control majority shares in the Agricultural Development Bank (ADB), has pledged its shares, proceeds, entitlement and voting rights to uniBank.

According to the report, the consortium, led by Belstar Capital – a turnkey project finance and implementation institution, also includes Starmount Development Company Limited, EDC Investments Limited and SIC-FSL.

These institutions took up a substantial stake (51%) in ADB’s Initial Public Offering (IPO) in 2016 when the bank announced its plans to go public. With these 51 percent shares under the control of uniBank, including having majority voting rights, the bank (uniBank) can now determine the strategic direction of ADB.

Bank of Ghana not recognising uniBank acquisition of ADB

Few hours after Agriculture Development Bank (ADB)’s purported acquisition by UniBank Ghana limited, the financial market regulator – Bank of Ghana according to reports was not in the know to sanction the takeover.

A Graphic online story has it that a source familiar with the BoG’s position on the matter said in confidence that the stance by the banking sector regulator is informed by the fact that uniBank as an entity does not have majority shares in ADB.

The decision by some shareholders of ADB to pledge their shares, proceeds, entitlement and voting rights to uniBank, leading to the alleged takeover was also not sanctioned by the BoG, the source added.

“The thing is uniBank does not, on their own, have majority shareholding in adb but what happened was some shareholders of ADB promised to support uniBank at the board level.

Minority raises alarm over ADB collapse

Minority Caucus in Parliament warned of a possible collapse Agricultural Development Bank (ADB) if measures are not put in place to stop the Minister of Finance, Mr. Ken Ofori-Atta, from allegedly forcing management of the bank to grant loans to cronies of the governing New Patriotic Party (NPP).

According to them, Mr. Ofori-Atta has reduced the mandate and role of the minister of finance to some credit disbursement entity in order that they can reward, as usual, their political cronies.

Their accusations follow the approval of a GHC10,459,500 million loan from ADB to MacDan Shipping Company by the finance minister.