Tuesday, June 17, 2014

Court to rule on mandatory takeover of HFC June 23

June 17 page 20
The Commercial Court in Accra will, on June 23, 2014, determine whether or not to set aside a suit challenging the mandatory takeover of HFC Bank’s shares by the Republic Bank.
An application filed by Mr Fui Tsikata, lawyer for the Republic Bank, is praying the court to set aside the writ of summons brought against Republic Bank and the Securities and Exhcnages Commission (SEC).
It is also praying the court to dismiss the entire action on the grounds that it is without merit and shows no cause of action.
But lawyers for HFC Bank, led by Nania Owusu-Ankomah, are opposed to the application and praying the court to entertain the writ on the grounds that it has merit.
The court, presided over by Mr Justice George K. Koomson, at its sitting in Accra yesterday, directed parties to file written submissions to enable the court to rule on the matter on June 23, 2014.

Timeline for parties
The Republic Bank and the SEC have been given 24 hours to file their submissions, while HFC Bank has 24 hours to respond upon receipt of the filed submissions.

The Republic Bank filed the action on the grounds that the Securities Industry Law 1993 (PNDCL 333) provides explicitly for the matters complained of by HFC to be submitted to the SEC before redress can be sought in court.
According to the Republic Bank, it was improper for the HFC to resort to the court when it had, indeed, failed to report alleged breach of Securities Industry Law to the SEC as was required by law.
The applicant is further arguing that the HFC Bank took the legal action without authorisation from the board of directors of HFC Bank.

Abuse of process
According to the bank, HFC’s action was vexatious and an abuse of the court process because the board of directors of HFC Bank approved the transaction eight months ago.
It said the transaction, which formed the core issue before the court,  had been resolved by the board of directors of HFC Bank and for that reason HFC Bank had no leg to stand on.

The HFC Bank, on May 23, 2014, instituted legal action against the Republic Bank and the SEC.
According to the bank, there was a transaction involving the purchase of HFC shares held by the Union Bank of Nigeria from the Republic Bank, which according to HFC, was in breach of SEC Law.
According to the HFC Bank, the Union Bank of Nigeria sold its shares to the Republic Bank in breach of the SEC Law.
But the Republic Bank is arguing that that transaction had received approval from the board of directors of HFC Bank.

Click HERE for more stories on the HFC takeover issue

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