Mar 2015 Financial News

Republic fined for takeover breach

Mar 10, 2015

Ghana’s Securities and Exchange Commission (SEC) has fined Republic Bank for breaching that country’s takeover code. However, the T&T bank has been cleared of allegations of insider trading which surfaced last year during the bank’s acquisition of HFC shares from the Union Bank of Nigeria. According to newspaper reports from Ghana, the allegations were made in January by two directors of HFC Bank who called on the SEC to investigate their claims before beginning the process of a mandatory takeover of HFC bank began.

Last May, HFC Bank sued Republic Bank and Ghana’s SEC claiming there had been breaches of the SEC code on takeovers and mergers in the attempt to do a mandatory takeover by purchasing HFC shares held by the Union Bank of Nigeria. However HFC Bank was ordered by Ghana’s Supreme Court present their accusation of insider tradingto to the SEC for investigation. The SEC has now ruled that Republic Bank unintentionally breached some rules of the Takeover Code by not reverting to the SEC for approval.

The SEC’s code on takeovers and mergers states: “No person shall make an offer to acquire shares or voting rights of a public company which together with shares or voting rights if any held by such person or by persons acting in concert entitle such person to exercise effective control in the target company without complying with the takeover procedures…”

The SEC said the allegation of insider trading could not be substantiated since Republic Bank duly disclosed the price per share on offer and the board of HFC Bank and the Bank of Ghana alo approved the purchase of the additional shares. It further found that Republic Bank did not use any non-public price sensitive information to acquire the shares from Union Bank which were available to the public. The SEC said the bank sought the approval of HFC Bank’s board, as well as the Bank of Ghana to acquire the shares.

Republic Bank, which has acquired an over thirty per cent stake in HFC Bank, is required by the Takeover Code of the SEC to make a mandatory offer to all the shareholders of HFC. However, that process has been stalled by separate legal challenges from HFC’s management and shareholders of HFC which have been dismissed by Ghana’s Supreme Court. With the latest claims now out of the way, the mandatory takeover process is expected to resume.

Source:
Trinidad Guardian
Tuesday March 10, 2015

http://www.guardian.co.tt/business/2015-03-10/republic-fined-takeover-breach