Data Bank, Golden Development Dragged to Court

The Securities and Exchange Commission (SEC) has taken legal action against the Golden Development Holding Company Limited, its board of directors and its broker, Data Bank to compel them to return investors' funds after failing to meet the Initial Public Offer of the company and listing the company on the Ghana Stock Exchange (GSE). The Fast Track High Court is yet to fix a date for hearing.

Sources close to the Sec indicate that the commission wants to make sure that all refund to prospective shareholders have been paid and with interest.

The GDHC failed to raise an amount of ¢10 billion three years ago when Data Bank launched the offer to the public to raise money for the expansion of the company.

As was the case of the CAL Bank oversubscription, it was required of the Bank and the company to refund all funds from prospective shareholders within specific period. Refusal of the broker to pay the amount would result in the bank paying an interest of 5% in accordance with Section 284 sub section 2 of the companies' code.

This has come after the Commission cancelled the IPO of Blue Mont Trading Ghana Limited when the company failed to open up the parent company for scrutiny.

The legal suit has followed recent complaints that the commission was not monitoring the interest of the capital market to ensure investors' protection.

The company was to raise ¢30 billion but managed to raise only ¢4 billion.