E-Malt.com News article: Ghana: High Court to arbitrate on the nature of the acquisition of and merger between Guinness Ghana Breweries Ltd and Ghana Breweries Ltd

ThinkGhana prayed November 14th the Accra Fast Track High Court to order the Securities and Exchange Commission (SEC) to conduct investigations into the nature of the acquisition of and merger between Guinness Ghana Breweries Ltd (GGBL) and Ghana Breweries Ltd (GBL), Public Agenda (Ghana) published November 13th.

Osafo-Buabeng, the counsel for ThinkGhana, submitted that the earlier work done by the SEC on the matter could not be described as investigations in the true legal sense of the word.

"There was no investigation," he declared, adding that, "investigation should be given its legal meaning and that to investigate is to conduct an official enquiry into a matter and not merely to determine it".

In her response, Ms. Bonsu, the counsel for SEC submitted that the processes of investigations cannot be determined by any dictionary definition but by the body tasked to do so. The requirements of a mandamus, she said, include the fact that the applicant should have a legal right, there should be a public duty to be performed and that it should be applied in good faith.

Ms. Bonsu argued that the applicant, ThinkGhana, has no legal right in the case in that it is neither a shareholder nor creditor or a director in either GGBL or GBL and that it has no legal right in any merger. He said the application for mandamus had also not been done in good faith in that the applicant is seeking to decide the end of the investigations.

"We are regulators and will not allow ourselves to be used to settle personal scores," she claimed, adding that, Joseph Aboagye Debrah, a Director of ThinkGhana was an ex-employee of GBL.

She further contended that she did not see the purpose that a mandamus would achieve since the deal between GGBL and GBL was struck two years ago.

Reacting to Ms.Bonsu's submissions, Mr. Osafo-Buabeng argued that there was no time limit as to when a complaint of alleged breaches could be raised and that the moment breaches are established they render the processes null and void.

ThinkGhana is alleging that far from what the business community and Ghanaians in general have been told, the deal between GGBL and GBL is one of a 'takeover' and not a 'merger' and that the alleged phony deal was allegedly used to mislead the SEC.

According to ThinkGhana, the SEC allegedly refuse to apply Ghana's securities laws to the alleged breaches by Guinness Ghana Breweries Limited (GGBL) before, during and after the acquisition of Ghana Breweries Limited (GBL) through the Ghana Stock Exchange (GSE) in December 2004.

The court, presided over by Justice Ofoe, has slated ruling on the matter for December 7, 2006.

ThinkGhana is a not-for-profit NGO dedicated to the upholding of good corporate governance and rule of law, and SEC, on the other hand, is the regulatory body of the GSE

ThinkGhana was represented at the hearing by Messrs. Joe Aboagye Debrah and Kojo Larbi, who are all directors.

According to Mr. Debrah, ThinkGhana's court action has been necessitated by the alleged continuing disregard for Ghana's securities laws by the regulators and the impunity with which breaches of Ghana's securities laws have been allegedly condoned by the authorities till date.

He said fortunately, "Ghana's Constitution and the securities laws give us an opportunity to seek the intervention of the law in a matter that is sure to set a precedent in issues relating to mergers and acquisitions activities in Ghana. The process also gives an opportunity to further clarify the issues regarding for an investigation into the acquisition of GBL by Guinness Ghana and to make a case for good corporate governance in Ghana, which we believe, is equally as critical to Ghana's socio-economic development as the present-day clarion call for good governance in our body-politic."


15 November, 2006