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In Ghana’s peculiar case, it is important that the
underlying development pattern, having grown over the years,
is made to blossom further. The country is obliged to work
to facilitate increased capital flow from the available
foreign direct investment in the world market.
One should not forget the role of governments since 1983
when the Economic Recovery Programme (ERP) began, in
securing a favourable investment climate for all. Recently,
we have had in place the Foreign Exchange Law and the
Financial Administration Act among others, to facilitate an
investor friendly and enabling business environment for
growth.
The recent episode in Ghana involving the First City
Monument Bank (FCMB), a strategic investor and CAL Bank
should not be seen in isolation. Some observers have begun
to wonder what the real place of Foreign Direct Investment
is in our development plans.
As an emerging economy, Ghana needs a robust move to
stimulate vital portions of our financial system into
reality to make them come to terms with trends in the
international market place.
It would be most unhealthy for not just for our financial
sector but also for the country’s ambitions of attracting
direct foreign investment if international financial markets
and the investor community become worrisome about the safety
of their investments in Ghana, if any. It is even worse when
the wrong signals are sent out implying that regulators push
their regulations to the extreme to make their entry or
participation difficult and virtually impossible.
As is the case in all
international markets, stocks on the Ghana market are public
and fully transferable as and when a holder so wishes. One
wonders how investor confidence can be reinforced if the
general perception among the investor community is that
Ghana’s regulatory authorities can meddle in or even
arbitrarily determine who can sell, buy, or transfer stocks
and to whom?
The Ghana Stock Exchange (GSE) has laid down procedures for
‘substantial’ acquisition of shares and it is my pleasure to
present these below particularly for the benefit of those
who may have been dazzled by all the tall procedural
technicalities which has been fed them since the CAL Bank
issue erupted. They are as follows:
1. Where any person acquires or agrees to acquire any shares
and the number of shares so acquired or agreed to be
acquired, together with the total number of shares already
held by such a person; exceeds or shall exceed in the
aggregate 15% of the voting capital of the company, the
company and the acquirer shall notify the Exchange within 2
days of such acquisition or such agreement for acquisition.
(2) Where any person holds shares which in the aggregate
carry less than 25% of the voting rights in the Company, he
shall not acquire any shares which, when aggregated with the
shares already held by him, shall carry 25% or more of the
voting rights unless he notifies the Exchange and fulfils
the conditions specified in rule 2.
Provided that nothing in this sub-rule shall apply to a
person who on an application to the Council is specifically
granted exemption.
(3) A listed company which has any information on the
transactions mentioned above which has or is likely to have
any effect on: the company's assets and liabilities; its
financial position; or the general course of its business
leading to substantial movements in the price of its shares
shall make this information known to the Exchange within 7
days.
(4) The above requirements shall not be applicable to an
acquisition by a person who has announced his firm intention
to make an offer to a listed company and has also notified
the Exchange.
Within three (3) months of the relevant transaction, a
public announcement of a takeover offer shall be made both
by the offeror company and the offeree company when: -
(a) any person in his own name or in the name of any other
person acquires, whether by a series of transactions over a
period of time or otherwise, securities which, when
aggregated with securities already held or acquired by that
person, shall carry 25% or more of the total
voting rights of the offeree company, or;
(b) any person secures the control or management of a
company, by acquiring or agreeing to acquire, irrespective
of the percentage of the voting capital, the securities of
the directors or other members, who by virtue of their
holdings of securities together with the holdings of their
relatives, or nominees control or manage the company. The
offeror shall notify the Exchange at least 14 days before a
public announcement of the offer is made. If the offer is
made by a person other than the ultimate offeror the
identity of such other person shall be disclosed at the
outset in the notification to the Exchange as well as in the
public announcement.
The GSE rule indicates that the offeror shall place the
offer, in the first instance, before the board of directors
of the offeree company and the offer shall contain the
following particulars:-
a. detailed terms of the offer;
b. identity of the offeror
c. details of offeror's existing holding in the offeree
company;
d. all conditions to which the offer is subject; and
e. confirmation by the auditors of the offeror that
resources available to the offeror are
sufficient to satisfy full acceptance of the offer.
The information specified in rule 2(4) a-e above together
with copies of documents and announcements relating to the
offer, shall be made available to every shareholder (both of
the offeror company and the offeree company) at the same
time and in the same manner.
The offer document (addressed by the offeror company to the
offeree company) shall contain the following information:
financial information relating to the offeror company;
intention of the offeror company regarding continuation of
the business of the offeree company; intention of the
offeror company regarding any major changes to be introduced
in the business of the offeree company; long-term commercial
justification of the offeror company for the proposed offer;
and such other details as may be prescribed by the Council.
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OF TAKEOVERS AND HOSTILE TAKEOVERS
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