The Ghana Stock Exchange (GSE) last Friday upon the advice of the Bank of Ghana taken a decision to put on hold a transaction in CAL shares involving a total of 14,130,000 shares that saw the bank's share price jump by GH¢ 0.40 to GH¢1.05.

The price, accordingly has been adjusted in isolation of the trade to GH¢0.66.

Samuel Kofi Yamoah, Managing Director of the GSE speaking in a telephone interview with the Financial Intelligence team disclosed that the BoG had given directive to put on hold the transaction whilst investigations were conducted to find out the persons behind the trade.

The block trade that took place on Tuesday, May 27, 2008 had on the day pushed up the GSE All Share Index, the benchmark measure of the Accra bourse up 90.59 points to 9,844.71.

Afare Donkor, the man at the centre of the contention, is purported to have bought the shares that would have secured him 32,250,000 shares, translating into a 19.67% stake in the company. This, several analysts believe could be a move to consolidate his voting power in his bid to get some favourites to the board and to push for the removal of the Managing Director, Frank Adu Brako Jnr. from office.

Management of Databank brokerage who executed the deal appeared puzzled by these developments.

The decision is also reported to have seriously infuriated Daniel Ofori, who had been denied booty out of his 7.70% stake in the bank.

The reason for placing the transaction on hold beats the imagination of many sector analysts contacted.

Referring to Reg. 7 (3) of the GSE rule book, one source established that the practice was not unprecedented and served to protect dealers and clients from unusual price swings.

"During trading, the source explained, "if the next price would be greater than a 10% change from the last executed price, the Authorised Dealing Officer (ADO) is to call upon the Presiding Officer (PO) to inquire if trading should continue. The presiding officer can halt trading in the stock if he expects a thin trade would result in unusual.swing in price."

The twist however, the source said, "is the fact the rule book spells out that trading cannot be impeded whatsoever if it involves a substantial volume, above 5% of the total shares of the equity".

Further it is factual that the BoG statutes demand a three-month notice ahead of transactions in a bank that involved the purchases of over 15% of a stake in a bank, whilst the GSE requires notice in transactions involving over 10% stake in a company.

The sale however constituted 8.62% of the total number of shares and therefore does not fit in any of the possibilities for putting the transaction on hold.

Attempts to reach the officials of the central bank for their version of the issue proved futile.

Questions are being raised whether such actions by regulators will not serve as disincentive to investors and at the same time derail efforts being made to whip up investor interest in the market.

One analyst asked, "Has the decision to halt the transaction got anything to do with the position of CAL MD as the Chairman of the GSE? Are we watching a situation of conflict of interest play in this instance?”

Should the transaction be blocked, this would be the second time a significant trade in the company's shares would have been invalidated.

In December 2006, an attempted hostile take over bid for CAL Bank by the First City Monument Bank (FCMB) of Nigeria was barricaded.

Even though the FCMB succeeded in acquiring the stake of The International Finance Corporation (IFC) who at the time held 16.54% stake in the company, and the CDC Group's 8.61%, an attempt to buy Saudi Prince Al Waleed's 10.73% stake was blocked by the Bank of Ghana (BoG) and the Ghana Stock Exchange (GSE) who said the transaction constituted a breach on their rules. Until the Emergency General Meeting (EGM) scheduled for this Thursday, CAL Bank will continue to dominate the headlines in the wake of issues of power wrangling at the bank that has made analysts busybodies, consulting here and there as to what the codes of the regulators have to say on such developments relating to corporate governance.