Republic Bank of Trinidad & Tobago (RBTT), the largest shareholder in HFC Bank, has been found to have breached certain portions of the Takeover Code for taking over corporate entities in the country, attracting a GH¢1 million fine.
The Securities & Exchange Commission (SEC) disclosed this in its reaction to a request by Kwasi Asante, a shareholder of the HFC Bank, through his lawyer, dated March 3, 2015.
Signed by Dr Adu A. Antwi, Director-General of SEC, the letter said SEC’s investigations into RBTT’s purchase of an additional 23,638,340 shares of HFC Bank from Union Bank within a 12-month period revealed that Republic Bank breached Rules 4.1, 4.2 (a) and 4.3 of the Takeover Code.
‘Investigation into the matter has revealed that Republic Bank breached Rules 4.1, 4.2 (a) and 4.3 of the Takeover Code by not reverting to the Commission for approval, but relying on the approval of the Bank of Ghana for the purchase of the additional 23,638, 340 shares of HFC bank from Union Bank within a 12-month period, when the Mandatory Takeover Rule had been triggered and the Commission had not granted them exemption.’
SEC’s Director-General said he recognised the plea by Republic Bank of the lack of clarity between the directives of the Commission and the consent from the Bank of Ghana (BoG), which according to them made them undertake the purchase.
He continued: ‘Notwithstanding the recognition of the plea, Republic Bank has been asked by the commission to make a payment of One Million Ghana cedis (GH¢1,000,000) in settlement of the breach as same was found to be unintended.’
On the allegation of Insider Trading made against RBTT by Mr Asante, SEC said after its investigation into the matter, it established that the allegation could not be sustained because of some reasons.
‘Firstly, a press release of the Ghana Stock Exchange dated 10 th June, 2013 indicated that Republic Bank would make a public offer to all shareholders in the event that the Commission did not grant Republic Bank an exemption from the mandatory Takeover process, adding that the price Republic Bank sought to offer was disclosed as GH¢0.56 per share.
‘Secondly, the Board of HFC Bank and the Bank of Ghana also approved the purchase of the additional shares.
‘Thirdly, that the facts of the matter fell outside the provisions of the said Rule 34.4 (a) (b).
‘This is because Republic Bank did not use any non-public price sensitive information to acquire the shares from Union Bank. The shares were available to the public and Republic Bank also sought the approval of HFC’s Board and the Bank of Ghana to enable it acquire those shares.
‘From the above, it is clear that the Republic Bank did not acquire the said additional shares of 7.8 percent of HFC Bank with any non-public information they had.’
SEC explained further that all investors, including HFC Bank and its subsidiaries, agents and representatives, with the knowledge of the potential Takeover, bought and sold shares of HFC Bank at the time Republic Bank purchased the shares from Union Bank.
By Samuel Boadi
This article has 0 comment, leave your comment.