Cancel Sale of Merchant Bank - Andrew Awuni

The Executive Director of the Centre for Freedom and Accuracy, Mr Andrew Awuni, has filed a writ at the Accra Fast Track High Court seeking an order for the cancellation of the purported sale of Merchant Bank Ghana Limited to Fortis Private Equity Fund Limited. He is also seeking an order directing that the offer for the sale of Merchant Bank Ghana Limited if justified, be advertised properly. He is further praying the court for an interlocutory injunction to restrain the Bank of Ghana from issuing any licence to Fortis Private Equity Fund Limited to operate Merchant Bank Ghana Limited as validity acquired concern. Mr Awuni is also seeking an order requesting Parliament to institute an inquiry into the sale of Merchant Bank Ghana Limited to Fortis Private Equity Fund Limited. Joined to the suit are the Social Security and National Insurance Trust (SSNIT), Bank of Ghana and Fortis Private Equity Fund Limited. In his statement of claim, the plaintiff said in recent times, SSNIT proposed to divest itself of its shares in the Merchant Bank, of which it was the majority shareholder, to a strategic investor. The statement said as the majority shareholder holding the funds and contributions of workers of Ghana, SSNIT was obliged to explain why it needed to divest its shares in Merchant Bank, but decided to keep mute over the reasons for offloading its shares in the bank. It said in spite of the palpable silence by SSNIT to explain why it needed to divest itself of its shares, it was publicly alleged that the bank was owed huge sums of money by its creditors whose debts were adversely affecting its operations and therefore the decision by the government to sell it off. According to the statement, consequently, several well-known international, as well as local financial and banking institutions made bids to acquire Merchant Bank, among which was the Rand Bank of South Africa, which was reported to have put up a strong bid. “The plaintiff avers that he is reliably aware that Rand Bank of South Africa offered to pay GH¢199.3 million to acquire 75 per cent of the shares of the company and also undertake to recover the toxic debts of Merchant Bank, which allegedly had bedevilled its operations, by entering into negotiations with UT Recoveries, a local debt recovery company, upon the recommendations of the Bank of Ghana,” the statement said. It said the deal was reported to be the best ever made for Merchant Bank, but the offer was mysteriously rejected in favour of a less known entity. It said the deal purportedly entered between Fortis Private Equity Fund Limited and the Government of Ghana with the tacit approval of the Bank of Ghana was not good enough and amounted to short-changing the taxpayer and the contributors whose money SSNIT invested. According to the statement, the deal, if allowed, would amount to short-changing the people of Ghana and same was a flagrant violation of the 1992 Constitution. It said Fortis Private Equity Fund Limited (which was a far less known entity) had no known reputation in banking or finance and to have been chosen over such a reputable financial institution as the Rand Bank of South Africa to take over the alleged ailing bank raised a lot of questions about the transparency of the deal. It said the deal over the sale of Merchant Bank Ghana Ltd lacked transparency and violated all known banking and financial rules and regulations, especially seeing that the interests of the workers who were minority shareholders had not been taken into consideration. “It is incumbent on the Bank of Ghana to explain why it would approve such a deal at the expense of a better one offered by Rand Bank of South Africa, for instance,” it added.