Belstar Capital Limited has described as untrue and erroneous claims by the Bank of Ghana that its shares in ADB Bank were acquired fraudulently.

A statement by Belstar capital said the BOG did grant all the permissions necessary to put the BELSTAR lead consortium in the majority acquisition of ADB Bank, hence, finds the claims by the Central Bank surprising and strange.

Belstar’s reaction comes after the Bank of Ghana on Monday annulled all shares held by Belstar Capital Limited, Starmount Development Company Limited, SIC-Financial Services Limited and EDC Investments Limited (EDC) in ADB Bank Limited.

A statement by the Central Bank on Monday stated that “The Bank of Ghana considers that Belstar and Starmount are not fit and proper persons and cannot permit them to continue to hold shares acquired directly or indirectly in ADB.”

The move by the Bank of Ghana came after Belstar Capital, Starmount Development Company, EDC as well as SIC Financial Services Limited in March this year announced that they had pledged their shares, proceeds, entitlement and voting rights to Unibank, which has since been put into administration by the Central Bank.

“The Bank of Ghana considers that Belstar and Starmount are not fit and proper persons and cannot permit them to continue to hold shares acquired directly or indirectly in ADB.”

However, Belstar has also dismissed claims that it purchased the shares in ADB Bank using emergency funds given to uniBank – a leading local bank – by the BoG.

“As borrowers, Belstar will not know the source of the money offered but giving what we know to be the state of affairs at the time of the IPO, unibank or any bank would rather lend the cheaper deposits fund of which they held nearly 3 billion cedis as opposed to the ELS of nearly 800 million cedis. We believe thus that the BOG statement is incorrect, untrue and regrettable.”

Below is the full statement by Belstar

BELSTAR CAPITAL LIMITED wishes to express its discomfort and surprise at what appears to be a leaked letter purportedly written by the BOG to the ADB over the matter of our majority stake in the ADB bank.

The contents of the said letter find full expression on the front page of the Graphic of 17th July 2018 as “BOG Annuls shares of 4 institutions in ADB”.

The letter alleges in paragraph 3 thereof, that the shares in ADB acquired through an Initial public offering IPO by BELSTAR and the other 3 companies, were acquired by the use of the BOG’s emergency liquidity support obtained by UNIBANK, and placed at the disposal of the BELSTAR consortium in the form of a loan.

This statement is untrue. Whilst information available to BELSTAR confirm that owing to a default in loan repayments to unibank by key government-related entities, the bank had sought emergency liquidity support from BOG, the quantum of depositors funds available to UNIBANK at the time of the IPO far exceeds the amount of money loaned to BELSTAR to acquire shares in ADB .

As borrowers, Belstar will not know the source of the money offered but giving what we know to be the state of affairs at the time of the IPO, unibank or any bank would rather lend the cheaper deposits fund of which they held nearly 3 billion cedis as opposed to the ELS of nearly 800 million cedis . We believe thus that the BOG statement is incorrect, untrue and regrettable

The statement also paints a scenario in paragraph 5 thereof, where it suggests some sort of insider trading and criminal conduct against the consortium. The allegations contained therein are also grounded in the erroneous thought that the initial lending to BELSTAR is from the ELS. In the circumstance, all those allegations collapse on the face of it because their foundation is flawed for one can put something on nothing and expect it to stand. These allegations are also regrettable, to say the least.

Indeed, the IPO regulations required BELSTAR and the consortium to seek permission from the BOG once they intended to own a certain quantum of shares. Such permissions is requested and granted or declined in accordance with ACT 930, the Banks and Specialized Deposit Taking institutions Act. Thus the BOG is aware and did grant all the permissions necessary to put the BELSTAR lead consortium in the majority.

It is thus unfortunate for the statement to suggest that the transactions were carried out without the knowledge of the BOG.

BELSTAR and its consortium are reputable business entities and are led by credible actors with years of experience in money market and financial transactions.

We wish to say that we will take steps to correct the erroneous impression that the BOG has put out and use the appropriate channels to restore our business interest to encourage other private sector players to believe in the free market principles for that is a key to creating a Ghana Beyond Aid.