Merchant bank board disapproved sale to Fortiz

It has now emerged that some board members of Merchant Bank Ghana (MBG) were not in favour of the sale of the bank to Fortiz Private Equity Fund Limited.

In a meeting held by the board a fortnight ago, Noel Addo, Board Chairman, invited further comments from the directors on the Share Purchase and Subscription Agreement (SPSA) with Fortiz.

But instead of offering their support for the deal according to the expectation of the chairman, most of the directors registered their displeasure over various aspects of the transaction.

They also blamed the Social Security & National Insurance Trust (SSNIT) and the Bank of Ghana (BoG) for virtually ‘dashing away’ Merchant Bank to Fortiz on a silver platter.

The Centre for Freedom & Accuracy, a policy think-tank, led by Andrew Awuni, its Executive Director, at a press conference yesterday in Accra, disclosed: “We managed to intercept the proceedings of that meeting. Professor Bill Buenar Puplampu was on record as indicating that the purchase price, as shown in the Fortiz deal, was weak given the fact that the principal shareholder (SSNIT) was being diluted to 10 per cent.

“When compared to the FirstRand transaction, this transaction does not give the bank value,” he emphasized.

Professor Puplampu also said since Fortiz was buying a bank, it must have the pedigree to own a bank.

Excluding himself from approving the SPPA, Professor Pupulampu has since resigned his position as director of the bank.

“Issa Anafure, the board member representing the minority shareholder, SIC Life, also stated that the KPMG report, as circulated, shows that of the three parties who expressed interest in the bank, the two namely, UT Bank and Sabre, would have satisfied the requirements to address the bank’s challenges. In fact, he said an acquisition by Sabre would have taken the bank’s capital adequacy ratio to 17 per cent.

Another director, Dr. Daniel Seddoh said he was unhappy with the way directors were rushed to consider the SPSA, adding that the impression created by the Fortiz transaction was that SSNIT was giving the bank away.

Mona Quartey, a director, said she would have appreciated it if there was more time, adding that the board could have been part of the process of choosing a buyer.

Joseph Tetteh, a board member and Managing Director of MBG, expressed dissatisfaction with the way in which the acting Director-General of SSNIT dealt with him and rushed him to sign the SPSA which at that time had not been seen or read.

Mr. Tetteh called for the SPSA to be brought for all directors to see.

Four members of the board have since resigned from the board.

Meanwhile, Managing Editor of the New Crusading Guide newspaper, Malik Kweku Baako, has hinted of plans by President John Mahama’s brother, Ibrahim Mahama, to settle his company’s indebtedness of GH¢175 million to Merchant Bank by December 15, 2013.

Kweku Baako noted that the President’s brother was in the process of repaying the loan which his Engineers and Planners firm contracted from the bank in 2007.

If the foregoing is the case, then the sale of the bank to Fortiz would be irrelevant since the amount involved could cater for the woes of Merchant Bank, he stated.