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Business News of Tuesday, 5 May 2015

Source: Daily Guide

ADB Management acted wisely – Kpordzih

Stephen Kpordzih, Managing Director of the Agricultural Development Bank (adb), says the bank’s management has done nothing wrong to warrant the recent action by union workers over the alleged sale of its national head office, among others.

The reaction follows calls by the Union of Industry, Commerce and Finance Workers (UNICOF) led by John Esiape, its chairman that government must compel the MD of adb to proceed on leave while investigations commence into allegations of corruption at the bank.

But Mr. Kpordzih maintained that management of the bank has always taken and will continue to take decisions in the best interest of the bank.

Speaking to BUSINESS GUIDE in an interview yesterday in Accra, Mr Kpordzih stated the aggrievedUnion of Industry, Commerce and Finance Workers (UNICOF), led by John Esiape, do not understand the decisions of ADB management, hence their action.

“We have some of our head office departments operating from Dankwa circle which is a rented office from Citizen Kofi, some operate from Ring Road Central, also from a rented property. We have others also operating from Nima, which is also a rented property from the Catholic church, some were operating from Achimota, also a rented property and the rest were operating from Cedi House, also a rented property.

“In anticipation of our going to the Stock Exchange, it was important for us to do a proper physical branding; physical branding also means that we align our processes to facilitate workload and so people can also have shared platforms and so it was necessary to bring all the head office departments together,” the MD said.

However, Mr Esiape claimed that just 120 workers out of the over 520 head office staff worked outside the ADB House building, and that that could not constitute 60 percent of head office staff as explained by Mr Kpordzih to the media.

Mr Esiape said it was a justification to sell the office and rent an expensive one.

On the issue of renting out the adb House initially, he said that suggested that the bank was going to make GH¢3.5million per annum while in its outright sale, the highest bidders, a Ghanaian company and another foreign company offered to buy it for $10million.

He said the toilet facilities and electrical wiring of the adb House were not in any good shape, adding that the building’s structure was prohibitive and lacked sufficient parking space.

If management had decided to value the building for an outright sale, GH¢17.7million would have been generated to fund growth.

“If you want to do rental, you’re going to spend far more than another GH¢6-7million to be able to realize GH¢3.5million per annum. The Board took the decision that the property should be sold for the proceeds to fund growth; the proceeds were never intended to be used to pay rent wherever we went. It was converting a non-earning fixed asset into cash and therefore creating liquidity to fund growth,” he emphasized.

“But I can confirm to you now that the adb House is not sold and we have not re-engaged.”

ADB, the MD said, entered into a partnership with Westport Properties, a real estate development fund from South Africa to develop the new head office building known as the Accra Financial Center.

“ADB’s contribution in the project is just the value of the land which is valued at just $2.4million at the time of the project in 2012.”

That, he said, gave ADB a shareholding of 5.6 percent. The bank negotiated with the developer to up its shareholding to 10 percent with the provision that if after construction, the cost comes down, adb’s share in it would move up to 15 percent.