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11.10.2004 Business & Finance

Shareholders dissolve Boards of CDH Discount

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Accra, Oct. 11, GNA - Shareholders of CDH Discount Company Limited and its affiliates have dissolved the Board of Directors of the affected companies and appointed an interim Management Board to prepare "a credible" management and financial restructuring plan for the companies, including infusion of fresh capital.

A statement issued in Accra by the Bank of Ghana (BoG) said the action followed a 30-day deadline given to shareholders to inject fresh capital to bring the companies' negative networth to positive networth and also meet minimum capital requirements.

The Bank of Ghana and the Securities and Exchange Commission (SEC) suspended the licences of CDH Financial Holdings Limited, CDH Discount Company, CDH Asset Management Ltd and CDH Securities Ltd several weeks ago.

The shareholders were asked to submit credible Management and Board re-organisation programmes.

The statement said the Bank of Ghana and SEC, which are the Regulators, decided after considering the submissions of the Interim Management Board that the licences of CDH Discount Company, CDH Asset Management Company and CDH Securities Ltd would remain suspended. It said the activities of CDH Financial Holdings Limited would also remain frozen since it had operated as a financial institution without licence.

The Regulators said the original 30-day deadline given the shareholders to produce and implement credible restructuring and refinancing plans, had been extended for 30 more days as demanded by the Interim Management Board.

"During this period, the Interim Management Board is to prepare and implement a restructuring plan including injection of fresh capital and the re-organisation of the Management and Board of the respective companies."

The statement said in the event that the shareholders were not able to meet the required capitalisation and other necessary conditions, the licences of the companies would be revoked.

The Central Bank said the Government would honour its obligations to all customers, who purchased Government of Ghana Securities, such as Treasury Bills, Notes and Bonds through CDH Discount Company Ltd. "These bills are currently being rolled over on maturity to maintain their values."

The Regulators said the decisions were without prejudice to any other legal or administrative measures that could be initiated against the companies and their officials, directors and shareholders.

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