THREE CORPORATE institutions involved in the sale of the distressed Merchant Bank yesterday rocked an Accra Commercial Court with motions seeking to challenge the capacity of Andrew Awuni to institute legal action against the sale.
Arguments over the issue lasted for over six hours with Egbert Faibille, counsel for Mr Awuni, the Executive Director of Centre for Freedom and Accuracy, responding to all issues raised against his client. The contending corporate bodies which brought the case against Mr Awuni were the Bank of Ghana (BoG), SSNIT and Merchant Bank.
Basically, the three were asking the court to dismiss Mr Awuni?s application with several reliefs directed at them seeking to revert the sale on the grounds that he had no locus in the matter.
The court, presided over by Justice Sophia Bernasko Essah, started hearing the matter at exactly 9:00am and when DAILY GUIDE was leaving the court at 4:00pm, the lawyer for SSNIT was on his feet arguing extensively as to why Mr. Awuni?s application should not be entertained.
The court has adjourned the matter to January 27, 2014 to deliver a ruling.
Baffour Awuah, lawyer for SSNIT, stated that Mr. Awuni was not an active member of the Trust since for the past 10 years and seven months he had not contributed to the pension scheme.
Even with his 143 months contribution, he said he was not qualified for pension under the law, raising serious questions about the law establishing the Trust.
He said Mr. Awuni was not a trustee to have instituted the action and that it was a dangerous step if entertained by the court which would lead to absurdity in corporate law.
BoG Position
The BoG, on the other hand, appeared to be running away from the low sale of Merchant Bank as it had indicated that it did not contribute to the pricing of the 90.6 per cent shares allegedly acquired by Fortiz, a private equity fund.
The central bank approved the deal for Fortiz to pay GH?90million for a 90 per cent stake in Merchant Bank. The plaintiff?s case was that BoG should have been diligent in exercising the power of approving it.
However, at the Commercial Court, BoG, through its lawyer, disclosed that it was not its duty to be diligent concerning the determination of the value of the shares.
This duty, he stated, was to be determined by SSNIT and Fortiz, the only two parties which have power to do so.
Samuel Cudjoe, counsel for the central bank, made this known when he moved a motion praying that Mr. Awuni?s application challenging the transaction should be dismissed because there was no cause of action against BoG.
The motion was one of the three similar actions from Merchant Bank and SSNIT challenging the capacity of Mr. Awuni in embarking on that legal tussle with the institutions.
According to the lawyer, under the law, the regulator had nothing to do with the price and that it was the duty of the two parties to determined that.
If Mr. Awuni thought that the price was bad, the main reason why he was in court, it was not the business of the bank and, therefore, BoG could not be accountable for that.
Counsel for BoG argued that the plaintiff did not have any legal right to have brought an action seeking a declaration that the bank did not act fairly and candidly when it exercised its discretionary power of approving the sale as well as an order to set that approval aside.
?When it comes to transfer of shares the law is clear. It is between a transferor and a transferee. Where does he come in??
Mr. Cudjoe stated that the plaintiff could not bring the action at all and that it was a dangerous action as he was not a shareholder of Merchant Bank or a party to the transaction.
Basing his argument on the Banking Act, Mr. Cudjoe indicated that BoG was the only authority with statutory powers to deal with transfer of shares involving banks.
Third parties, he said, were not involved in such transactions. ?The fact that you believed there was an error in the transaction did not allow you to bring an action to annul the process.?
Describing Mr. Awuni?s action as vexatious and unmeritorious, the lawyer observed that none of the two parties, who had legal right to express any grievance, had complained that BoG did not act fairly or candidly.
?If somebody is selling his shares what has it got to do with you? When the two parties were doing their business were you there??
He said Mr. Awuni, knowing he had no case, had embarked on a crusade in the media to vilify BoG and to sensationalise the issue.
Mr. Faibille responded that arguments raised by the lawyer could have been true if he was to be dealing with a private limited liability company. ?We are talking about a trust?.
Mr. Faibille stated that the contributors were all that the trust or pension fund was about and as a result of that the contributors had a right to question how their contributions were used.
He argued that Mr. Cudjoe had no mandate to call for the dismissal of his suit when he had not stated which of the paragraphs in his pleading was offensive and must be struck out.
Mr. Faibille observed that BoG took decisions in the public interest, so they had to explain why they took that discretionary power of approving the deal. He asked the court to dismiss the motion with a heavy cost.
Merchant Bank
Merchant Bank lawyer, Benson Nutsukpi, also stated that Mr Awuni, not being a member of the distressed bank, could not challenge the decision of the directors of the bank.
He said the court was not the appropriate forum for Mr. Awuni as a contributor to vent his reaction.
He said the plaintiff could have written to the SSNIT board to review its decision or report to the board and national pension authority and could extend that by suing SSNIT and asking another limited liability company to account to him on decisions taken by directors.
Mr. Faibille responded that it was in the right forum and that there were serious issues or allegations to be determined by the court which included a letter written to the Presidency by directors of Merchant Bank reducing a debt of $38million being owed by Engineers and Planners, a company owned by the brother of President John Mahama, to $28million without any tangible reason.
By Mary Anane
