Government can now take up shares in a registered company – SC

The Supreme of Ghana has ruled that the government of Ghana can take up shares in any company registered under the Companies Act, 2019 (Act 992).

According to the apex court, the government of Ghana can take up shares of an entity through a commercial venture.

In unanimity, the Supreme Court speaking through Asiedu JSC in the case of Mahama Ayariga v. The Attorney-General & 3 others said: “In this peculiar case, the government had established the Ghana Amalgamated Trust Plc (3rd defendant) under Act 992 as a limited liability company, and a special purpose vehicle with the aim of raising the needed finance from the capital market to support selected indigenous Ghanaian Banks. The government also acquired Redeemable Preference Shares to the tune of GH¢800 million in Ghana Amalgamated Trust Plc.”

The court further explained in its ruling that, the definition of public corporation as stated in Article 295(1) of the Constitution admits of other means or methods by which public corporations may be established.

The court said, under the Constitution specifically Article 295(5), Ghana as a state can create public corporations out of funds provided by the Parliament of Ghana or by the use if other public funds. These may be done in addition to establishing public corporations by provisions of an Act of Parliament.

The Supreme Court per this case additionally held that such entities established by the State to run as commercial ventures do not cease to become public corporations and such monies spent by the government in acquiring the shares constitute expenditure of the state.

The Supreme Court thus decided that Ghana Amalgamated Trust Plc is a public corporation which was validly established by the State by virtue of the provisions in Article 295(1) of the Constitution and under the Companies Act, to operate as a commercial venture.

Such a company does not form part of the public service of Ghana as provided under Article 190 of the constitution.

SSD/

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