GSE engaged in hypocrisy and political gimmickry - Adongo

Outspoken Member of Parliament has accused the Ghana Stock Exchange (GSE) of hypocrisy and political gimmickry because of its handling of the transaction between Belstar who is a shareholder in the Agriculture Development Bank and UniBank.

GSE suspended the trading of ADB shares after the media reported a UniBank takeover of Ghana’s agricultural bank.

The GSE in a statement said it was not aware of the takeover but reversed the decision barely 24 hours later when it emerged that the deal was a pledge.

Speaking to Peter Bamfo on the Gold Power Drive on Friday, Isaac Adongo said the GSE should have known better because it has records on all transactions involving shares of companies listed on the bourse.

“Read Rule 77(1) of the Central Securities Depository law and it would tell you that all securities that are in the depository can be pledged as collateral; all securities that are pledged in the depository cannot be traded on the market and would not be released until the plegor is able to extinguish his obligation under the collateral agreement.”

“The person who has now pledged the security does not need to carry the paper documents there. It is now a letter from the shareholder or owner of the security; in this case SIC is writing to them that I have pledged my securities to Belstar,” he stated.

Isaac Adongo further revealed that the laws also allow for the pledge to be extended to other rights of the shareholder.

“You can actually pledge the shares, voting rights and proceeds in which case you are looking at things like dividends,” he explained

The Bolga MP questioned GSE: “In your depository, do you have all the shares that have been talked about pledged? Do you have the shares of SIC FSL pledged in your depository system? Do you have EDC pledging its securities or its shares in ADB? Do you have SAMOL in your system pledging their securities? Do you have BelStar pledging their securities? The answer to these questions is YES.”

Isaac Adongo was therefore surprised at the suspension of trading of ADB shares when the GSE had foreknowledge of the arrangements between BelStar and UniBank.

“What is it about ADB pledge arrangement that the Securities and Exchange Commission or GSE doesn’t know? Is it the announcement that you didn’t know or the fact that you have the system showing that they have been pledged?”

“What is the new information that they were suspending trading about?” Isaac Adongo further queried.

The outspoken Bolga MP said the decision was to deter the increase in the purchase of shares.

“Probably GES was thinking that UniBank or somebody would buy more shares and increase their shareholding,” he stated.