Trading in shares of ADB Bank on the Ghana Stock Exchange is expected to slow down from today [July 17, 2018].
It follows the Bank of Ghana’s annulment of the shares held in ADB by four investors.
The central bank has described as questionable, the processes of acquiring shares by the affected shareholders which it says could jeopardize the future of the country’s financial sector if not resolved.
The four shareholders comprise; Belstar Capital (24%), Starmount Development Company (11%), EDC Investment (6%) and SIC Financial Services Limited (10%).
In all, the four institutions control at least fifty-one percent stake in the operations of ADB.
This translates into an investment share of 158 million cedis out of ADB's 310 million cedis capital.
According to the central bank, Belstar and Starmount acquired additional shares to increase their stake in the bank with funds obtained from unibank; such funds the central bank maintains is from the liquidity support to cushion it from shocks.
“The liquidity funds obtained by uniBank were improperly and unlawfully on-lent to Belstar and Starmount to acquire shares (including shares held by the Financial Investment Trust on behalf of the Bank of Ghana) in ADB’s IPO,” a statement from the BoG said.
In the regulator’s view, Belstar and Starmount are not fit and proper persons to hold shares in ADB as it cites their participation in a series of other questionable, unsafe, and unsound related party transactions involving uniBank Ghana Limited to the detriment of Ghana’s financial system and for their financial gain and benefit.
It is however interesting to note that the development comes four months after reports suggested that Unibank has assumed majority ownership of adb following the transfer of the majority shareholders to unibank.
Adb denied the claims with the central bank stressing that any such move could not hold without prior approval.
For now, it is unclear what will happen regarding the share value of the affected shareholders.
But the Head of Banking Supervision of the Bank of Ghana, Osei Gyasi explained to Citi Business News that the Ghana Stock Exchange will iron out all outstanding issues on the course.
“We do not expect the statement to affect adb or the stock market in any way…adb and unibank are doing their business normally…it is not about them at all,” he stated.
As at Monday, July 16, 2018, no volume of adb shares had been traded and the share price stood at 5 cedis 95 pesewas.