Ghana took back control of Agricultural Development Bank Ltd. after the regulator annulled deals for more than half of the lender’s shares following its initial public offering in 2016.
The West African nation’s central bank regulator canceled the holdings of Belstar Capital Ltd., Starmount Development Co., Ecobank Capital Ltd. and SIC Financial Services Ltd., which together held 52 percent in the lender known as ADB, Bank of Ghana said in a statement on Monday.
Belstar and Starmount are affiliates and entered into deals with SIC and Ecobank Capital Ltd., the asset management unit of Ecobank Ghana Ltd., to purchase ADB’s shares without the regulator’s knowledge, the central bank said. In addition, Belstar and Starmount acquired their collective holding of 35 percent with cash obtained from UniBank Ghana Ltd. — using funds from the central bank that had been intended to provide emergency liquidity support to UniBank, the regulator said.
UniBank was placed into administration in March.
“Belstar and Starmount have participated in a series of other questionable, unsafe, and unsound related-party transactions involving UniBank Ghana Ltd. to the detriment of Ghana’s financial system and for their financial gain and benefit,” the regulator said. Belstar and Starmount “aren’t fit and proper” and cannot be allowed to hold shares either directly or indirectly in ADB, it said.
Calls to the office of the acting managing director of SIC Financial Services, Eno Ofori-Atta, weren’t answered. Simon Dornoo, the administrator of UniBank, wasn’t available for queries when contacted at his office. Kisseih Antonio, the managing director of asset management at Ecobank Capital, didn’t immediately comment when contacted by phone. Calls to the offices of Belstar and Starmount in the capital, Accra, didn’t connect.
ADB sold 326 million cedis ($68 million) in shares in December 2016 after the Bank of Ghana and the government agreed to sell most of their holdings in the lender. The central bank’s decision to annul some of the transactions comes as the lender seeks to raise an additional 310 million cedis in shares to meet new minimum capital requirements.
The shares held by Belstar, Ecobank, SIC and Starmount will revert back to the central bank, said the regulator. Ghana’s government owns 32.3 percent of ADB while the Bank of Ghana owns 9.5 percent, according to data compiled by Bloomberg.
The Ghana Stock Exchange suspended ADB’s shares on Tuesday for three days to prevent “disorderly trading,” the Accra-based bourse said in an emailed statement.
Shares in ADB have surged 98 percent since the listing, which took place after two failed attempts. A planned issuance in 2015 was blocked by opposition lawmakers and a workers’ union that accused the lender of failing to seek approval from parliament and negotiate terms with bank employees. In March 2016, the bank refused to accept the bids it had received.