ADB sale: Workers turn sword against management
Agitation by workers and a threat of a legal suit by the minority in Parliament are dimming the planned sale of 75 per cent shares of ADB on the Ghana Stock Exchange.
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Although, the Managing Director of adb, Mr Stephen Kpordzi, said the concerns of the minority in Parliament had been referred to the Ministry of Finance for direction, the transaction advisors, IC securities, would go ahead with the planned Initial Public Offer (IPO).
Cabinet and the Securities and Exchange Commission (SEC) have approved the listing of the bank on the stock market to offload a little over 100 million shares to the public by the end of April to raise Gh¢300 million to expand the bank’s operations.
But Member of Parliament for Efutu, Mr Alex Afenyo Markin, told the Graphic Business in an interview that “both Cabinet and SEC are engaged in an illegality and unconstitutionality”.
“We just want to look at the transaction and see how the funds are going to be used after the shares have been floated, and all that, scrutinise same and examine whether or not it will be in the interest of the people”, he said
“For the purposes of constitutional, accountability and transparency, it cannot be said that cabinet approval alone is sufficient in a matter like this,” he added.
“I believe that if all these things had come to Parliament for parliamentary scrutiny, perhaps we could have looked at some of these things and properly put across our views,” Afenyo Markin added.
“We are halting this sale in the Supreme Court, latest by Tuesday, May 5, for a constitutional interpretation in this whole matter”, he told the Graphic Business.
The bank, which was set up in 1965 by Act 286, is one of the only two wholly publicly owned banks in Ghana.
The government owns 52 per cent of the shareholding, with the remaining 48 per cent held by the Financial Investment Trust on behalf of the Bank of Ghana.
Workers fight against sale
The workers, who were expected to support management to push through the IPO bid, have turned their sword against the listing.
Chairman of the ADB Workers Union, Mark Imoru, insists the workers are of the opinion that “instead of listing on the stock market, the bank should rather embark on a massive recovery exercise to rake in the GH¢600 million that we have out there in unrecovered loans.”
The workers are also claiming that “contrary to the impression being created by management over the years that the bank is doing well, our financials for 2014 indicates that the bank is fast sinking and urgent steps need to be taken to salvage the dwindling fortunes of the bank”.
“We want the immediate and unconditional dissolution of the board of directors and the immediate and unconditional removal of the managing director” a resolution passed at an emergency national executive committee (NEC) meeting of the ADB staff union in Accra stated.
President calls for calm
The President, Mr John Mahama, has called for calm in the workers and management impasse and consequently directed the Minister of Employment and Labour Relations, Mr Haruna Iddrisu, to resolve the problems facing the bank.
He said it was his belief that the protestations by the workers over the decision of managers of the bank to raise money through an Initial Public Offer had been caused by miscommunication.
The agric bank became the subject of controversy after news that it had disposed off its head office for US$10million.
The bank has moved into a new office at the Accra Financial Centre for a reported 1million cedis monthly rent excluding utilities and parking.
The Managing Director of ADB, Stephen Kpordzi, explained that the bank rented a total space of 7,250 square metres and each square metre costs US$37. This means that the rent of the bank can go up when the cedi loses value against the dollar. The bank is also paying US$67,260 monthly for parking.
This is not the first time the sale of the Agricultural Development Bank has hit the headlines. In 2007 an attempt was made to sell the bank to a strategic foreign owned bank, Stanbic Bank of South Africa but pressure from the Trades Union Congress (TUC) and other groups forced the government to abandon the move.
The sale of GCB has also at a point been considered by the previous regimes, but was also abandoned due public pressure.
The argument against the sale were that, Ghana Jan's will lose ownership of their most prized assets if th banks were sold to a strategic investor.
However, this current move to divest more 75 per per cent shares to the public through the Ghana Stock Exchange will likely the get the larger public support with little resistance once the management engages the workers.
But the biggest hurdle for the board and management now will be the threat of a legal suit by the minority members for not not seeking Parliamentary Approval on the sale. But since officials of the bank insist they have satisfied all the legal and regulatory requirements to seal the IPO through, analysts will have to see how the legal tussle puns out.
For now, we all have to count on time from the Supreme Court.
