HFC Bank in Ghana has taken Republic Bank to court, seeking an injunction to prevent Republic from continuing the process for a mandatory offer to all shareholders in HFC.
In a statement yesterday, Republic said it was confirming that it, along with Ghana’s Securities and Exchange Commission, has been named as a defendant in proceedings brought on behalf of HFC Bank in the High Court of Ghana.
On June 16, in a hearing of Republic Bank’s application to dismiss the action, before his Lordship Justice Koomson at Commercial Court B, Accra, Ghana, the matter was adjourned for parties to file written submissions and set down for ruling on June 23, the release said.
“The bank is disappointed that these legal proceedings have been resorted to, as they have delayed the mandatory takeover process. Republic is confident, however, that the matter will be successfully resolved, thereby allowing shareholders to exercise their rights to consider whether to sell their shares,” the release continued.
Last year, the bank had requested a waiver from Ghana’s Security and Exchange Commission for the Code on Take Overs and Mergers, but was denied. The SEC advised Republic that it must comply with the mandatory takeover requirements and make an offer for remaining shareholding in HFC Bank Ghana Ltd, the bank had said.
In April, Republic received approval from the Bank of Ghana to make the offer. If the offer is successful, it could lead to Republic Bank becoming the majority shareholder of HFC Bank and possibly take over the institution.
HFC, however, maintained that Republic had, in its “quest to take over the institution”, adopted a process “against what was agreed upon” since Republic became the major shareholder.
Republic owns 40 per cent of HFC; by Ghanaian law, a company owning 30 per cent or more shares in an instituion must make a mandatory offer for 100 per cent.
Republic, the largest indigenous institution in the Caribbean, said in its statement yesterday that it “holds integrity at the core of all its relationships; generating trust and confidence from its customers, suppliers, shareholders and the general public”.
“The bank consistently demonstrates honesty, fairness and openness in everything that it does, and its business processes and practices support service excellence while protecting the interest of
its customers, its employees and its shareholders,” it said. —Carla Bridglal