Supreme Court okays HFC takeover
The Supreme Court has sanctioned the takeover process of the HFC Bank by the Republic Bank (RBL) of Trinidad and Tobago.
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The court, by a unanimous decision, ruled in favour of Republic Bank (RBL) in an application to quash a ruling of an Accra High Court which had prevented RBL from proceeding with a mandatory offer to all shareholders of the HFC Bank under the ‘Takeover Code’ of the Securities and Exchange Commission (SEC).
The ruling therefore paves the way for Republic Bank to continue with the process of acquiring HFC Bank without hindrance.
The five-member panel of Justices, presided over by Mr Justice William Atuguba, dismissed the suit initiated by HFC Bank against Republic Bank and SEC in an attempt to prevent Republic Bank proceeding with a mandatory offer to all shareholders of HFC Bank after Republic Bank had acquired more than 30 per cent of the shareholding of HFC Bank.
Other members of the panel were Justices Sophia Akuffo, Vida Akoto-Bamfo, Baffoe-Bonnie and Sule Gbadegbe.
This therefore means that the Supreme Court has also quashed an earlier ruling by a high court, which was at the instance of HFC bank that had sought to freeze the process.
The legal battle began in May this year when HFC Bank sued the Republic Bank and the Securities and Exchange Commission (SEC) for what it described as breaches of the SEC Code on Takeovers and Mergers. HFC Bank had also applied for an interim injunction against Republic Bank and SEC.
But the Republic Bank, in a countermove, also filed a suit praying the court to dismiss the application and allow SEC to take over the matter.
The Supreme Court has therefore prohibited the High Court from proceeding any further with the suit and set aside the writ filed by HFC Bank.
RBL excitement
Reacting to the ruling of the court, the Director of African Operations of Republic Bank, Mr Robert Le Hunte, said: “We are pleased with the ruling of the Supreme Court. Based on this ruling of the highest Court of the land, Republic Bank will continue the process as outlined under the Takeover Code which was halted by the institution of the proceedings by HFC Bank. We have always acted in accordance with laws of Ghana and the regulations of SEC and will continue to do so.”
He added: “We are looking forward to continuing to contribute significantly to the economic growth of HFC Bank, Ghana and Africa in the coming years. We assure our stakeholders of our long-term commitment and dedication to achieving success.”
Background to the ruling
After Republic Bank acquired an over 30 per cent stake in HFC Bank, it was required by the Takeover Code of the Securities and Exchange Commission to make a mandatory offer to all the shareholders of HFC. The management of HFC initiated an action in the High Court to prevent the process of the mandatory offer from going ahead. Two other court cases initiated by some shareholders of HFC also sought to restrain Republic Bank from making a mandatory offer to all shareholders under the ‘Takeover Code’ of the Securities and Exchange Commission (SEC). In both those cases, the courts upheld objections by lawyers for Republic Bank and decided against the attempt by the plaintiffs to have the courts restrain Republic Bank from proceeding with the mandatory offer to shareholders.
Republic Bank argued that HFC Bank should have submitted a complaint to SEC to investigate the alleged wrongdoing by Republic Bank before filing the action in court.
It also stated that the action was not authorised by the Board of Directors of HFC and the fact that HFC Bank accused Republic Bank of engaging in “insider trading,” which is a criminal offence, means that the action can only be prosecuted by the Attorney-General as a criminal case and not as a civil case.
