High Court stops ADB IPO
The Industrial and Labour Division of the High Court last Friday placed an interim injunction on moves by the Agricultural Development Bank (ADB) to float shares on the stock market.
Advertisement
The bank has begun processes for its Initial Public Offer (IPO) at the Ghana Stock Exchange but the legal team of the Union of Industry, Commerce and Finance Workers (UNICOF) sought the injunction after it filed two separate suits challenging the ADB’s decision to sell 40 per cent shares to foreign investors without parliamentary approval.
One of the suits is invoking the original jurisdiction of the Supreme Court to declare as unconstitutional, moves by the ADB to sign off part of the shares of the bank to two foreign firms without seeking parliamentary approval.
The other suit filed at the High Court is praying the court to restrain the bank and its agents from proceeding with the sale and/or marketing of the ADB’s shares pending the conclusion of negotiations with UNICOF.
UNICOF is also pleading with the High Court to compel the bank to convene a meeting with UNICOF to complete negotiations on the bank’s IPO and the quantum of shares to be offered to the staff of the bank.
Joined to the suit is the Attorney-General and Minister of Justice.
Supreme Court suit
The writ seeking to invoke the original jurisdiction of the Supreme Court is asking for a declaration that upon a true and proper interpretation of Article 181 (1) of the 1992 Constitution and Section 19 of Act 286, the issuance of shares to the public by the ADB and the trading on the Ghana Stock Exchange required prior parliamentary approval; and the refusal, neglect and or failure by the defendants to seek that approval amounted to a breach of the 1992 Constitution.
UNICOF is also asking the Supreme Court to declare that the decision by the government to grant the Cabinet approval authorising the board and management of the ADB to sell shares of the bank to the public without recourse to Article 181 (1) of the 1992 Constitution is a breach of the 1992 Constitution, because the Cabinet does not have the sole mandate of approving the said transactions.
Other Trending Stories
The applicant is further urging the Supreme Court to order that the government’s approval of the decision of the ADB Board without recourse to Parliament amounted to the usurpation of the constitutional mandate of Parliament under Article 181 (1), Section 19 of Act 286 and Order 171 of the Standing Orders of Parliament.
Another order being sought by the applicant is a declaration that the approval and authorisation given to the ADB to trade on the Ghana Stock Exchange by the Securities and Exchange Commission (SEC) without first confirming whether Parliament had approved the Cabinet’s decision to permit the bank to issue shares to the public undermined the 1992 Constitution.
Further orders
The applicant also wants the court to order that the government did not have the sole mandate to authorise ADB to sell shares to the public and trade on the Ghana Stock Exchange without prior approval from Parliament.
UNICOF is requesting for a declaration that agreements signed by the ADB with two foreign companies, namely Atlas Mara Limited and The Norwegian Investment Fund for Developing Countries, for the sale and purchase of 25 per cent and 15 per cent respectively of the issued ADB shares without parliamentary approval, were unconstitutional.
A further order directed at the Minister of Finance and the Attorney-General to refer the proposed sale of shares on the Ghana Stock Exchange to Parliament for consideration.
High Court suit
Bringing the suit on behalf of the workers of ADB, in its capacity as the union issued with collective bargaining certificate by the Chief Labour Officer to represent workers of the ADB pursuant to Section 99 of the Labour Act 2003, the UNICOF is praying the High Court to compel the bank to go back to the negotiation table to determine the quantum of shares the workers were entitled to.
Reliefs sought
UNICOF is praying the High Court to declare that the bank’s conduct of proceeding to launch its IPO was in gross disregard of the subsisting negotiations between the parties on the subject matter as well as in violation of the plaintiff’s right to negotiate on behalf of its members.
It is also asking the court to declare the bank’s action as a breach of the bank’s duty to negotiate in good faith as provided for under sections 102 and 97 of the Labour Act of 2003, Act 651.
The plaintiff also wants the court to hold that the decisions regarding all matters affecting the employment of the bank’s employees contained in the IPO and the quantum of shares as well as terms of conditions of allotment of shares to staff were matters to be negotiated by UNICOF.
Claims
According to the UNICOF, it was in the process of negotiating the shares due the workers of the ADB when the bank unilaterally decided to trade off 40 per cent of its shares to foreign investors.
“The plaintiff avers that while the negotiating process has not ended and no agreement has been reached and no deadlock has been declared, the defendant unilaterally ignored the legal processes of negotiations and proceeded to launch the initial public offer of its shares by publications in the Friday, July 3, 2015 editions of both the Daily Graphic and the Daily Guide newspapers.”
“The plaintiff avers that the conduct of the defendant does not only smack of bad faith, contrary to the duty to negotiate in good faith which the defendant is enjoined under section 97 of Act 651 to exhibit, but also violates the plaintiff’s statutory right to negotiate on behalf of its members,” the statement of claim signed on behalf of the plaintiff by its lawyer, Mr Justin Pwavra, deposed.
Writer’s email: mabel.baneseh@graphic.com.gh.
Advertisement