Dismiss application filed by Fortiz — Counsel
Lead counsel for Mr Andrew Awuni, Mr Egbert Faibille, on Tuesday asked the Commercial Division of the High Court in Accra to dismiss an application filed before it by Fortiz Equity Fund.
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The application filed by the counsel for Fortiz Equity Fund, Mr Tony Lithur, is challenging the capacity of Mr Awuni to sue for an injunction to be placed on the sale of Merchant Bank to Fortiz Equity.
Mr Lithur argued that per the statutes of SSNIT as a trust, it was only a trustee that could successfully pursue a legal action against the trust.
But Mr Faibille rebutted, saying that Mr Awuni had the capacity based on the fact that he was a contributor to SSNIT, which owns 90 per cent shares in the bank.
Mr Lithur further stated that the Social Security Act had made SSNIT a corporate entity and was only answerable to the Parliament of Ghana.
To that effect, he said Mr Awuni could not ask SSNIT to account to him.
He consequently prayed the court to dismiss Mr Awuni’s application on the grounds that when granted, it would open the floodgates for any other contributor to maintain an action against SSNIT in such related matters.
Mr Faibille again argued that the fact that SSNIT was a trustee gave contributors every right to maintain successful action without the shield of privity of contract.
He said according to Article 296 of the 1992 Constitution, public institutions had responsibilities to act in the best interest of their contributors, adding that the situation as it stood did not reflect that.
The court, presided over by Ms Justice Sophia Rosetta Bernasko-Essah, adjourned the case to December 18, 2013 for ruling.
Mr Awuni’s application for the interlocutory injunction could not be heard because it was in abeyance due to the fact that his capacity was being challenged.
If his capacity standi is determined in the matter, it will pave the way for the continuation of his amended application before the court to be heard.
Background
Mr Awuni is challenging the sale of Merchant Bank to the Fortiz Private Equity Fund while Mr Lithur, counsel for Fortiz, is praying for the action by Mr Awuni to be dismissed for lack of capacity.
Both parties have filed their affidavits in opposition to the applications and made their arguments, which had set the ground for the merit of the case to be determined.
In his application, Mr Awuni is seeking, among other things, an interlocutory injunction to restrain the Bank of Ghana (BoG) from issuing any licence to Fortiz to operate Merchant Bank as a validly acquired concern.
He is also seeking an order directing that the offer for sale of Merchant Bank, if justified, be advertised publicly.
Parliamentary probe
Mr Awuni is further seeking an order of the court requesting Parliament to institute an inquiry into the sale of Merchant Bank to Fortiz.
In his statement of claim, Mr Awuni said in spite of the palpable silence by the Social Security and National Insurance Trust (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, which debts were adversely affecting its operations and, therefore, the decision by the government to sell it off.
It said several well-known international as well as local financial and banking institutions made bids to acquire the bank, among which was the First Rand Bank of South Africa, which is reputed to have put up a strong bid.
The statement said the plaintiff was reliably aware that the First Rand Bank offered to pay GH¢199.3 million to acquire 75 per cent of the shares of Merchant Bank and also undertook to recover its toxic debts which allegedly had bedevilled its operation by entering into negotiations with UT Recoveries, a local debt recovery company, upon the recommendations of the BoG.
It said the deal was reported to be the best offer ever made for Merchant Bank but it was mysteriously rejected in favour of a less-known entity.
It said while the plaintiff, like any other contributor, had hoped that by rejecting the bid by the First Rand Bank the offer was going to be made public for other potential investors who were going to offer even better than what the First Rand Bank offered, Fortiz popped up as having acquired Merchant Bank, with the approval of the BoG, at GH¢90 million for 90 per cent of the shares of the bank and undertook to recover only 30 per cent of the toxic debts of the alleged ailing bank.
Short-changing people
The statement said the deal purportedly entered between Fortiz and the Government of Ghana, with the tacit approval of the BoG, was not good enough and amounted to short-changing the taxpayer and contributors whose money SSNIT invested.
It said the deal, if allowed to go on, would also be a flagrant violation of the 1992 Constitution.
Mr Lithur, on the other hand, is praying the court to dismiss Mr Awuni’s suit, which he described as too weak and did not have enough grounds to halt further transactions on the deal.
His application stated that Mr Awuni did not have the capacity to challenge the sale in court, though he was a contributor to SSNIT.
It further stated that Mr Awuni was not a party to the deal, and, therefore, did not have the right to challenge it.
