Friday, December 08, 2006




ThinkGhana wishes to express its concern about media reports that the Bank of Ghana (BoG) has ordered the cancellation of a trade in the shares of CAL Bank Ltd., a listed company on the Ghana Stock Exchange. The trade involved the sale of approximately 10.73% of the shareholding of Kingdom R5 and approximately 16.45% of IFC’s stake in CAL Bank to First City Monument Bank of Nigeria. This deal follows in the wake of the sale of 8.16% of the Bank’s shares by Actis plc, formerly CDC Capital Partners (a founding shareholder of CAL Bank) on Wednesday, November 29, 2006.

We wish to point out that in the development of Ghana’s capital markets, all regulators need to exercise caution in the application of perceived powers under law. ThinkGhana wishes to stress that it is the Securities and Exchange Commission (SEC) which has regulatory powers under the Securities Industry Law, 1993 (PNDCL 333) as amended, to regulate the securities industry in Ghana. Having due regard to the powers of the Bank of Ghana under relevant banking laws to regulate the banking industry, it is our sincere opinion that the Bank of Ghana should have acted through the SEC where it had legitimate concerns about the legality of the said trades on the floor of the Ghana Stock Exchange. ThinkGhana is concerned about the potential negative implications for foreign investors on the Ghana Stock Exchange where it is perceived that the powers of the SEC can be usurped by the Bank of Ghana unilaterally. We therefore wish to call on both the SEC and the Bank of Ghana to clarify the situation to assure investors about compliance with due process.

ThinkGhana also wishes to call on the SEC as a matter of urgency to intervene in the CAL Bank affair to ensure compliance with all relevant securities laws and regulations. It is clear from the actions on the Ghana Stock Exchange over the past week that a takeover attempt is underway. ThinkGhana is of the considered opinion that the brokers involved in the share transactions should be compelled to abide by the rules of the market or the appropriate sanctions should be applied. ThinkGhana is concerned that no press releases have been forthcoming from either the Ghana Stock Exchange or the acquirers or their brokers. This is a breach of the GSE’s own Takeovers and Mergers Rules and the GSE must make bold to enforce its rules to assure compliance and transparency on the market. ThinkGhana is particularly concerned that so far, it is only CAL Bank itself that has sought to abide by the rules of the market by issuing a press release after the initial acquisition by the First City Monument Bank of Nigeria.

ThinkGhana therefore takes the opportunity to call on the SEC as the apex regulator to ensure compliance with the rules and to prevent any other institution from invading its legal authority to regulate the industry. ThinkGhana calls on all regulators in the financial sector to work in harmony to allow for the efficient regulation of the capital market.

Finally, ThinkGhana wishes to implore all the regulators to be mindful of the fact that listing on a stock market implies that shares and stocks of the listed entity are freely transferable. We therefore call on the SEC to take another look at the restrictions on foreign investment on the market as being outmoded, and impracticable in the context of the government’s own declared free market policies and trade liberalization.

ThinkGhana is hopeful that the securities rules will be applied fairly and equitably to all players in the market such that the rights of investors will be protected at all times.

Thank you.

Yours in the service of Ghana,

Accra, Ghana.