AGC Softens Its Stance On Golden Share

The Chief Executive of Ashanti Goldfields Sam Jonah seems to be softening his stance on the government’s golden share in the AGC. The golden share gives the government, which owns 19 per cent of AGC, a veto over disposal of assets and leases and can be exercised in the event of liquidation.

The development signals a shift in strategy for AGC which had been hoping to persuade the government to surrender its golden share, long seen as a deterrent to foreign investors in the company. Matilda Asante has more.

The decision to change strategy stems from the realization government will not give up its golden share in AGC. The AGC Chief Executive has over the years campaigned for the complete removal of the government’s golden share in the company because of what he describes as investors fear that government could block a merger or take over deal with a large mining company.

The management of the company has partly blamed the golden share for the dismal performance of its share price on the New York Stock Exchange. The company also believes that the AGC risks being left out of the consolidation in the mining industry because of investors fear that government might invoke the powers of the golden to block any such deal.

The campaign to remove the golden share intensified upon the assumption of office of the NPP government, which was widely expected to be more receptive to the idea due to Mr. Jonah’s fall out with the former government.

But now Sam Jonah is trying to convince potential suitors that the golden share could be sidestepped. In an obvious departure from his regular arguments about the golden share the AGC boss told the financial times newspaper that he believes the golden share will be restructured. He described the golden share as a relic, which cannot do what people perceive it to do.

Mr. Jonah says he cannot believe that if there were a good deal on the table, the government would use its golden share to stop it. Analysts believe Ashanti could be a takeover target as the consolidation of the gold mining industry gains momentum. Possible bidders include Gold Fields of South Africa and Anglogold.