The Bank of Ghana has annulled the acquisition of 51% shares in Agriculture Development Bank held by Belstar Capital, Starmount Development company Limited, SIC Financial Services Limited, and EDC Investments Limited.

According to the apex bank in Ghana, the acquisition has not followed due process.

Recall that earlier this year, a consortium led by Belstar Capital, a turnkey project finance and implementation institution, Starmount Development Company Limited, EDC Investments Limited, and SIC-FSL reportedly pledged their shares, proceeds, entitlement and voting rights to uniBank.

The institutions took up a substantial stake in ADB’s Initial Public Offering (IPO) in 2016 that paved the way for the bank to go public. The bank raised about 326 million cedis in its Initial Public Offer (IPO).

However, BoG Governor, Dr. Ernest Addison, noted that the apex bank in Ghana has neither sanctioned the change of ADB ownership nor the willing of the majority shareholder’s rights to uniBank.

In his words:

“Just to clarify that the Central Bank has not given approval to the purported takeover or through the pledging of shares of the Agricultural Development Bank (ADB) to uniBank,”

The apex bank noted that the acquisition without the knowledge and approval of the Bank of Ghana was a breach of section 49 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

It also noted that the shares acquired by Belstar and Starmount were acquired with funds obtained from uniBank Ghana Limited which is currently in official administration using emergency liquidity support obtained by uniBank Ghana Limited from the Bank of Ghana in questionable circumstances. The Central Bank earlier this year placed the bank under administration after it became insolvent and appointed KPMG as the bank’s administrator.

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The liquidity funds obtained by uniBank were improperly and unlawfully on-lent to Belstar and Starmount to acquire shares including shares held by the Financial Investment Trust on behalf of the Bank of Ghana in ADB’s IPO.

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The bank further noted that Belstar and Starmount have participated in a series of other questionable, unsafe, and unsound related party transactions involving uniBank Ghana Limited to the detriment of Ghana’s financial system and for their financial gain and benefit.

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Agricultural Development Bank of Ghana, established in 1965, is a government-owned development and commercial bank in Ghana. The bank is the first development finance institution established by the Government of Ghana.  It is one of the commercial banks licensed by the Bank of Ghana.

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