CAL Bank Saga Afare Donkor Gets Support

Afare Apeadu Donkor, the largest retail shareholder of CAL Bank, seems to be getting support from other individual shareholders of the bank even before the Extraordinary General Meeting (EGM), which takes place on Thursday June 5, 2008 at the Osu Presbyterian Church.

The shareholders to a large extent shared the same sentiments with Mr. Donkor, who requisitioned the EGM to demand among other things the removal of Frank Adu Jnr, Managing Director of the bank because he and his management had allegedly shown disregard for the rights of shareholders.

An investments banker who wished to remain anonymous noted that his calculation had shown that it would have taken seven years for investors to recoup their returns if the 200 million Rights Issue had been approved at the annual general meeting (AGM), held in March this year.

On the issue of whether or not the action taken by Mr. Donkor was right, he explained on CITI FM, an Accra-based radio station's Breakfast Show programme that it was a step in the right direction as management and board of public companies should be made to respect corporate governance structure, which is now the fundamental theme in corporate management, not only in Ghana but globally.

Fred Oware, another shareholder expressed happiness that for once someone would lose their job because the interests of shareholders were not protected.

“On Thursday, I will be there to exercise my rights,” he explained.
Kofi Amoah, another individual shareholder showered praises on Mr. Donkor and mentioned that management must be transparent in their dealings by explaining transactions undertaken and those they want to pursue further to shareholders.

In a related development, Joe Aboagye Debrah, a Legal Practitioner and Chief Executive Officer of Think Ghana, an investment and financial advocacy body says the Bank of Ghana does not have the right by law to unravel the trading that occurs on the floor of the Ghana Stock Exchange (GSE).

The Ghana Stock Exchange (GSE) last Friday upon the advice of the Bank of Ghana took a decision to put on hold a transaction in CAL shares involving a total of 14,130,000 shares that saw the bank's share price jump by GH¢ 0.40 to GH¢1.05.

Kofi Yamoah, Managing Director of the GSE disclosed that the regulator of the banking industry had given a directive to the effect that the transaction be put on hold whilst investigations were conducted to find out the persons behind the trading.

But Joe Aboagye Debrah, a former legal counsel of the GSE speaking on the Breakfast Show as well said the Central Bank should have liaised with the Securities and Exchange Commission (SEC), regulator of the capital market, to suspend the trading where Danny Ofori, the second largest individual shareholder sold 7.70 percent of his stake in the bank to William Oppong Bio, an alleged close associate of Mr. Donkor.

“The controversy demonstrates that management of CAL does not have the right to toy with shareholders' rights.

“Corporate governance should be respected in all aspects of managing public limited liability companies,” he emphasized.

Meanwhile frantic efforts made by CITY & BUSINESS GUIDE to get Frank Adu, Managing Director of CAL Bank, to tell his side of the story proved futile.

By Charles Nixon Yeboah