Ashanti takeover "in breach of the law"

Accra - Ghana's main opposition party, NDC, said on Tuesday that an agreement by the government to sell gold producer Ashanti Goldfields to South Africa's AngloGold was "in breach of the law".

The government, which holds a 16.9% golden share in Ashanti that allows it to veto any merger or takeover deal, announced in October that it had agreed to sell the mine to AngloGold for an all-share price of US$1.42bn.

But according to MP John Mahama, communications director for the opposition National Democratic Congress (NDC), the merger violates the country's mineral and mining law, which requires a mandatory 10% participation by the government in every mining company operating in the west African state.
"As it stands now, the AngloGold offer is in breach of the law," Mahama said. "It is the minority's hope that the government will not put forward changes to the minerals and mining law, simply to accommodate the wishes of AngloGold."
British rival Randgold had bid $1.7bn for the Ashanti mines but was denied, something Mahama said the government of President John Kufuor had yet to explain to the public as it prepared to place the deal before parliament for approval.
"This gives the impression that parliament is expected to be a mere rubber stamp to the commitments that are being entered into with AngloGold," Mahama said.
"It seems that the interests of AngloGold are essentially being put ahead of the national interest that government has sworn to protect and serve."
A high-placed presidential source, without elaborating on when parliament would debate the merger proposal: "We are aware that the leadership in parliament is working hard to ensure that the merger is sent to parliament in good time."
Ashanti had said in October that its board agreed unanimously to continue recommending AngloGold's offer to shareholders because it was "in the best interest" of its shareholders, employees and the people of Ghana.