SSNIT, Others Reject CAL’s Proposals

It was controversies galore at yesterday's annual general meeting (AGM) of CAL Bank, following the rejection of the three major resolutions of the bank by the three largest shareholders, the Social Security and National Insurance Trust (SSNIT), Afare Donkor and Daniel Ofori.

This also triggered the objection of the resolutions by almost all the other shareholders that attended the AGM and apparently led to the suspension of the issues proposed by the board led by its chairman, George Victor Okoh.

The three, who in all have 26.63, 11.05 and 7.70 percent holdings in the company, constituting 45.38 percent of the total shares in CAL, objected to the resolutions, saying they needed tangible and convincing explanations before supporting the decisions.

Firstly, Ken Alorzuku, an investment analyst with SSNIT acting as a proxy on behalf of the Trust, challenged the rationale behind the increase in the directors' remunerations to GH¢377,000, about 79 percent over the previous financial year.

According to him, since Ecobank Ghana Limited and SG-SSB Ghana Limited which achieved higher returns or turnovers than CAL in 2007 were paying GH¢160,000 and GH¢100,000 as directors remunerations respectively, CAL could not pay the huge GH¢377,000 as directors' annual fee.

Besides, the company was paying less dividend of GH¢0.0105 per share to shareholders as against the higher dividends being paid by those two banks which held their AGMs on Wednesday and Thursday.

Mr. Alorzuku pointed out that since he also had the consent of the other two large shareholders, Mr. Donkor and Mr. Ofori, the issue should be suspended.

On the issue of increasing the stated share capital of the company by up to GH¢200 million, though a lady representing Mr. Donkor who was speaking on condition of anonymity said the shareholder supported the move in order to meet the Central Bank's new capital requirement of GH¢60 million as well as execute larger transactions, he did not support the amendment of regulation 10(a) of the company's regulations.

But Frank Adu Junior, Managing Director of CAL Bank said there was the need to raise additional shares through the Rights Issue in order to have a larger capital base in the face of the oil discovery where there would be bigger transactions to execute.

According to him, it would be prudent to raise the monies but said the bank would look at other alternatives which would certainly come at a cost.

However, Ernest Thompson, Chief Legal Officer of SSNIT challenged Frank's assertion saying SSNIT was not consulted by the board since what he gathered was that the monies were going to be used for the construction of a new head office for the bank and other projects.

The heated arguments thus culminated in the suspension of the issue.

It also led to holding up of the transfer of up to GH¢7.7 million from income surplus account to stated capital.

Shareholders again voted against the approval of the creation of a pool of shares of up to 3 percent of issued shares as at December 31, 2009 for distribution to non-executive directors and executives of the bank over a period of 3 years.

They insisted that the 3 percent holdings allocated to the non-executive directors and executives were too much.

There was more drama at the AGM when an individual shareholder questioned why SSNIT which was a majority shareholder did not have representation on the board, an issue which Mr. Thompson said the Trust had proposed but to no avail.

By Charles Nixon Yeboah