Legal action initiated over sale of Merchant Bank to Fortiz

The Executive Director of the policy think tank, the Centre for Freedom and Accuracy, Mr Andrew Awuni, has initiated legal action against the Bank of Ghana (BoG) over the sale of Merchant Bank to Fortiz Private Equity Fund Limited.

Mr Awuni, who described the sale agreement as shrouded in secrecy, is seeking a declaration of the sale as illegal,  as, according to him, due diligence was not done in the acquisition proposal.

He said the fact that Fortiz was registered and incorporated in June, this year, soon after the First Rand Bank deal failed to go through, pointed to some suspicion in the entire acquisition and approval process.

Fortiz, a wholly owned Ghanaian equity firm, reached an agreement with the Social Security and National Insurance Trust (SSNIT) and SIC Life to take over the majority stake in Merchant Bank in October, this year.

Under the terms of the agreement, the acquisition includes the non-performing loans in Merban Assets Recovery Trust and Fortis will be required to inject adequate capital to address the solvency and liquidity challenges facing the bank.

The firm is also to implement a turnaround strategy to ensure that the bank continues to operate normally.

The equity firm has since November 1, taken possession of the bank after SSNIT had offloaded its majority stake in the bank.

The BoG, in reviewing the agreement and granting the sale approval,  also tasked Fortiz to list the bank on the Ghana Stock Exchange,  (GSE) within the next three years.

But  Mr Awuni, who had challenged the BoG to publish details of the transaction, wondered why Fortiz, which does not even qualify to obtain a banking licence, according to  BoG requirements, since it lacks the GH¢5 million capital, could be made the new owner of the bank.

He told the Daily Graphic in Accra that he was determined to pursue the case to its logical conclusion, since the bank in question was the property of the Ghanaian worker.

“We have taken notice of the transaction that the BoG is playing on Ghanaians; we know, as a matter of fact, that no agreement has been reached or signed between Fortiz and the other shareholders but the BoG has played a fast one by granting an approval to Fortiz,   thus virtually tying the hands of all other parties,” Mr Awuni said.

“I am a contributor to SSNIT; therefore,  it is my money, your money, they are using to do all these things; it doesn’t make sense,” he added.

Meanwhile, an energy expert, Dr Charles Wereko-Brobbey, who also described the sale as fraudulent on the part of BoG, has declared his intention to support the court action taken by Mr Awuni.

Source: Daily Graphic