Advertise companies listed for divestiture on GSE

Accra, June 7, GNA - Government should advertise companies listed for divestiture on the Ghana Stock Exchange (GSE) to enable the general public to buy shares in these businesses instead of their outright sale, a technical working group suggested on Tuesday.

Making the suggestion in Accra, the Technical Working Group tasked by the Government to find ways of developing the Capital Market said the public listing of these companies would lead to the attraction of needed capital to revamp their operations.

Mr Kojo Yamoah, Chairman of the group, who presented a report on their findings to Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, said the Government should ensure that future joint venture agreements had clauses that allowed disputes to be settled under Ghana's Arbitration Act.

He said measures should be put in place so that the Government would be able to exit any joint venture by offering it shares for sale on the GSE.

Mr Yamoah said current rules and regulations for joint partnership gave opportunities to one partner to buy the shares of the other partner, who wished to exit and "this is not very good for our country." "If Ghana should decide to exit any partnership, we must have rules in place to enable it to trade its shares on the stock market for the general public to patronize. We do not have to allow the other partner to purchase the shares," he said.

He advised that all joint ventures should be made public limited liability companies adding that the Government must also try to settle disputes of joint ventures in the courts.

Mr Yamoah identified delays in receiving payment or agreed process, access to and use of assets by buyers even when payment had not been made and double sale of part of concessions when divestitures were executed by different Sector Ministries as some of the challenges of divestitures in the country.

In this regard, Mr Yamoah recommended that companies under the Divestiture Implementation Committee (DIC) must be fully prepared for divestiture while the Sector Ministries were made advisory units of the DIC.

He said communities owning land that were subject to divestitures should be involved early in the process and adequate compensation paid in cash or shares.

Mr Baah-Wiredu, who received the report, said the capital market remained the key medium for the mobilization of resource for private sector development in the country and as such it required efforts to ensure its development and sustainability.

He said the Government was making conscious efforts to allow private sector access to long-term sources of finance through the development of the capital market.

"It is to this end that the Ministry of Finance and Economic Planning together with the Bank of Ghana has been taking the necessary steps to support Capital Market Development," he said.

He commended the Group for a good work done and gave an assurance that the Ministry would present a memorandum to the Cabinet within 10 days for review and implement the recommendations.

The Technical Working Group was set up to present a working paper that would recommend appropriate policies to develop the Capital Market. It was made up of two representatives from the Ghana Stock Exchange; Securities and Exchange Commission; State Enterprises Commission and the Divestiture Implementation Committee.