21.06.2004 Business & Finance

Open letter to Ken Ofori-Atta, Executive Chairman of Databank Financial Services Ltd

21.06.2004 LISTEN
By Christopher Hunt

Dear Mr Ofori Atta

In late Autumn 2002, Databank Brokerage Ltd invited the general public to invest in the shares of the Golden Development Holding Company. Supported by the Asantehene, the objective was to raise many billions of cedis to promote development in the Ashanti region.

The Asantehene toured the UK and US promoting this share issue and encouraging Ashantis in the Diaspora to support the formation of this company.

I subscribed for 2600 shares, costing 1.3m cedis on 6th January 2003. Since that time I have received no direct communication from Golden Development Holding Company, Databank or National Trust Holding Company - the putative registrars. No acknowledgement of receipt, no share certificate, no annual report for the company, no letter explaining the progress of the offer - NOTHING.

In autumn 2003 I attended the Ghana Expo 2003 at Alexandra Palace in London and met your Assistant Vice President of stockbroking services, Duke Ofori-Atta, who told me that the period of the Offer for Subscription had been extended because the amount subscribed had not met the initial target. But he didn't really know what was going on and would advise me on his return to Ghana.

In April this year, I met John Mensah Hagan of NTHC in his office at Martco House. He told me that he did not know what was going on - Databank has received various moneys, and the offer period has been extended again, but they have not received any application forms or details of shareholders.

My question is, what is going on? You have held my money, and the money of doubtless two to three thousand other investors like me, for up to eighteen months now, with no indication of what the eventual outcome will be. For those investors who subscribed in sterling or dollars, the exchange rate has inevitably moved against them, by 20 or 30%.

When I hold funds in my trading account with my UK stockbroker, where deposit interest rates are no more than 2%, I receive interest on my money - paid to me. In Ghana, where deposit interest rates approach 30%, no interest is paid to stockbrokers' clients on their deposits. I can only assume that Databank is earning interest on many billions of cedis paid by investors such as myself. The interest on my deposit alone must be approaching 700,000 cedis. Given the growth in the value of holdings on the Ghana Stock Exchange this year and last, the value of my investment could easily have doubled, if not quadrupled.

Is Golden Developments Holding Company trading? If so, when will we receive our share certificates? If not, when will our moneys be returned to us? What arrangements are in place to pay us interest on our monies?

If it is correct that the subscription lists are still open, are those who subscribed 18 months ago going to receive proportionately more shares than those who subscribe today in devalued cedis?

I recently subscribed for shares in Cafedirect plc in the UK - a small company that sells fairly traded tea, coffee and chocolate drinks. The target amount was £5m (80bn cedis approx), and the subscription period was about 6 weeks. The company and its sponsoring brokers provided fortnightly updates on the progress of the offer - when the initial target was reached, the amount subscribed by the initial closing date, and the number of shareholders (4400) who eventually completed the target amount - all published on their internet site. A major contrast to the way your company is doing business.

On my recent visit to Ghana I noted that members of your staff write columns almost every day in the Daily Graphic. Could I suggest that your company concentrates more on its primary business of managing investments on behalf of clients and companies, and communicates directly with its current investors, before encouraging its staff to pursue a secondary career in journalism.

Christopher Hunt 14 Vincent Road Croydon Surrey CR0 6ED Cc: Ghanaweb, Ghana Review International, Daily Graphic

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