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Business News of Thursday, 7 May 2015

Source: citifmonline

Suspension of adb sale commendable – Dr Bokpin

Head of Finance Department at the University of Ghana Business School, Dr. Godfred Bokpin has commended the government’s decision to suspend plans to float about 100 million of the adb shares on the Ghana Stock Exchange.

The decision was arrived at after a meeting between management of the Bank, the Workers Union and the Employment and Labour Relations Minister, Haruna Iddrisu.

This comes on the back of accusations of abysmal performance and conflict of interest leveled against the management and board of directors by the workers.

In an interview with Citi News, the banking and finance analyst insisted that the bank needs the breather to put its house in order before its shares are offered to the public.

“I think that the decision to put the deal on hold is the way to go because there are a lot of things that is happening within the adb today that doesn’t sit well within good corporate governance practices especially when you want to float shares to the general public,” he said.

“When the company get listed, management does not have a direct way of influencing the price but they can act in a way that is consistent in the way of the desires of the investors and the investors will reward those actions by going for the shares of that particular company,” added Dr. Bokpin.

The workers of adb vehemently kicked against the move and demanded an audit into the books of the bank before the IPO will be allowed to take place.

The workers also called for the dismissal of the Managing Director and a dissolution of the governing board of the bank for alleged mismanagement and attempts to sell off the bank.

The Minority in Parliament threatened to sue the bank for failing to seek approval from the Legislature before taking that decision to go public.

But the Finance Ministry indicated that no Parliamentary approval was needed for the IPO to take place.

The Employment and Labour Minister, Haruna Iddrissu acting on the directive of the President has had meetings with the workers and the management of adb to resolve the fracas. Speaking at press conference held by the bank, the General Secretary of the Union of Industry Commerce and Finance Workers (UNICOF), John Asiape said: “Government has intervened and the directive were to the effect that the sale of the adb house is no longer on the table so whatever was started, everything has been suspended so the sale is not going ahead.”

He said the IPO has also been suspended until “stakeholders have been engaged and in particular the union.”