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The country�s only mortgage institution, HFC Bank, is on the brink of a possible takeover by the Republic Bank of Trinidad and Tobago (RBTT). The bank, which controls over 30 per cent share of the mortgage industry, has remained the leading mortgage provider in the country since its establishment. With $1 million in technical assistance, $7 million in seed capital plus $25million in US funding, the World Bank and the Social Security and National Insurance Trust (SSNIT) in May 1990 created Home Finance Company Limited to provide funding for affordable housing for the growing middle class in the country. To date the bank has lived to its mandate of providing credit facilities for the Ghanaians to acquire their own houses. With the issuance of a universal banking license by the Bank of Ghana in 1993, going public in 1995 coupled with the raising of the capital requirements for all banks, HFC had to seek for new investors in order to meet the new capital requirements of the Bank of Ghana. However, current developments within the bank has enabled RBTT to raise its stake from about 8.8 per cent to 32.02 per cent on the back of new acquisitions from the Aeuros Africa Fund. Given that RBTT current interest in HFC which is now above the mandatory takeover point of 30 per cent for listed companies, the HFC Bank, one of the country�s most celebrated indigenous banks, risk being fully taken over by the Trinidad and Tobago financier. But the Securities and Exchange Commission (SEC) � the regulator of Ghana�s capital market � has declined to hid to the request from the RBTT for a waiver of the law that mandates an investor who exceeds the mandatory takeover point to make an offer to buy out other shareholders. According to a correspondence from the Bank of Ghana to the legal advisors of RBTT and the regulators of the market, RBTT have agreed with HFC Bank its intention to acquire additional shares to increase its stake to 40 per cent within the next 12 months. But in the view of the Bank of Ghana a mandatory takeover bid at this time in accordance with the Security and Exchange Commission (SEC) code on takeovers and mergers , it may trigger public interest issues and concerns which the central bank believes could have systemic implications for the wider banking industry. The Bank of Ghana therefore advised that in order to avoid any agitation among the various stakeholders including regulators, customers and shareholders, it would allow RBTT to take up to 40 per cent shareholding in HFC Bank for the time being. In an earlier interview with the Graphic Business published in the June 18-24, 2013 edition the Director-General of SEC Mr Adu Anane Antwi said that the request for waiver is not an end in itself. �It�s possible we will decline it. It�s also possible we�ll grant it but the best will be for the bank to prepare for both sides,� Mr Antwi said, declining to comment further in that regard. He, however, hinted in that interview that the commission would be finding out why Republic Bank is asking for the waiver and whether or not it had �sufficient resources� to buy off all other shareholders. Some three to four years ago there was an public outcry for Standard Bank of South Africa to buy out Agricultural Development Bank though the bank was not listed the Ghana Stock Exchange. The move for FirstRand of South Africa to purchase the distressed Merchant Bank also fell through with. Though most local banks need fresh capital to develop, total takeover is something that might not be taken lightly by Ghanaians. The Companies Act provides for a compulsory acquisition of minority shareholding if the acquirer has obtained at least 90 per cent in value of the shares of its target within four months of making the offer. The acquirer is mandated, within two months after achieving the 90 per cent, to send a notice to the shareholder who have not accepted the offer advising of its intention to acquire their shares. The minority share holders may apply to the court against such compulsory acquisition two months of receiving the notice. The court may prevent the acquirer from purchasing those shares or may set terms for such a purchase However, if they do not apply to the court, the acquirer can compulsory purchase the shares. In addition, the takeover code makes it clear that, where a takeover results in the offeror�s acquiring 90 per cent or more of the offeree�s voting shares, the offeror shall offer the remaining shareholders a consideration that is equal to the prevailing market price of the voting shares offered to the shareholders, whichever is higher. Before the Republic Bank increased its share holdings, the five major shareholders of the bank are, SSNIT 26.18 per cent; Aureos Africa Fund 23.23 per cent; Ghana Union Assurance 10.19 per cent; Republic Bank 8.79 per cent and Union Bank of Nigeria plc 8.44 per cent.