BHC buyout proposal not practicable - Liquidator
But workers say: BHC is still viable - Workers
BHC workers reject government offer of 90 billion cedis
BHC buyout proposal not practicable - Liquidator
Accra (Greater Accra), 22nd January 2000
Efforts by the staff of the Bank for Housing and Construction (BHC) to negotiate for a management-worker buyout of the bank is not practicable, the Liquidator has said.
The Liquidator said banking practice should be prudent and conducted along the lines of trust and confidentiality. "When any of these is broken, customers would find it difficult and almost impossible to deal with".
The Liquidator said this in an interview with the Ghana News Agency in Accra on Friday about the fate of the BHC workers and their petition to the President for a buyout.
The Staff of the bank, it was learnt, cannot receive their January allowance because their co-operation with the Liquidators has not been secured to make possible the preparation of their payrolls.
"When a liquidation process begins, it must be completed since it is not possible for anyone to take over the bank without running into losses", the Liquidator said.
"The workers' demand is not practicable since even if their demand is accepted, the public cannot return the trust that is needed. They would only go to the bank and withdraw their monies".
The Liquidator said the Co-operative Bank for instance, "has failed thrice in its existence and cannot be allowed to continue.
"Government has put in so much to help these banks in the past".
They said the best solution is to ensure a complete restructuring process.
"This must be in a short time, with a fresh injection of capital, new management and name and absolved by huge corporate institutions in the economy".
Meanwhile, a tour of some of the designated banks to pay customers of the two banks in Accra revealed that they are in the process of paying customers of the Co-operative Bank.
The banks detailed to pay staff and customers of the Co-operative Bank said payment would begin today and continue tomorrow, Saturday, January 22.
GRi
But workers say: BHC is still viable - Workers
Accra (Greater Accra), 22nd January 2000
Workers of the Bank for Housing and Construction (BHC) on Friday dismissed reasons given for the liquidation of the Bank saying it is still viable.
"BHC is a very viable investment and must not be liquidated outright", Mr. Ben Amegatse, Chairman of the Professional and Managerial Staff Union of BHC, said at a press conference in Accra.
"It is incorrect to say the Bank had made persistent losses", adding that it had made significant contribution to the Ghanaian economy.
Mr Amegatse said that between 1990 and 1995, BHC made a total net profit of 11.5 billion cedis after payment of taxes amounting to 7.5 billion cedis. It paid one billion cedis as dividend to its shareholders, including the government, during the period.
The Bank made a profit of 3.5 billion cedis in 1999 and currently it has a credit balance of about 42 billion cedis representing its primary and secondary reserves at Bnak of Ghana (BOG).
He said BHC's Financial Sector Adjustment Programme (FINSAP) Bonds worth 1.7 billion cedis that matured at the end of 1998 while that of 1999 have not been paid.
The Union Chairman said BHC's discount of government certificates of payment and cheques to 26 contractor customers valued at 11.8 billion cedis have not been paid.
Mr. Amegatse attributed the present predicament of the Bank to the 1996 A-Life financial scandal, in which it initially became indebted to the tune of 65 billion cedis. This was later reduced to 44 billion cedis and caused BHC's account with Bank of Ghana (BOG) to be overdrawn by 38.4 billion cedis as at December 1996.
Consequently, BHC was suspended from the Clearing House in February 1997 but it managed to reduce the overdraft balance from 38.4 billion cedis to 19.9 billion cedis in March 1998.
Mr. Amegatse said in April 1998 BOG took measures that enabled BHC to be re-admitted to the Clearing House.
"This means that BHC had used 18.5 billion of its resources to reduce its indebtedness to BOG."
He said BHC was given only 2.78 billion cedis out of the 22.2 billion cedis collected from A-Life as repayment to settle part of its indebtedness by the Task Force set up by BOG and the Serious Fraud Office.
Mr Amegatse said BHC has been meeting its commitments to BOG with regard to the primary and secondary reserves.
As at January five, 2000 the primary and secondary reserves of BHC stood at 51 per cent, which represents eight per cent more than BOG's requirement.
Mr Amegatse admitted that in 1998, BHC could not meet its capital adequacy ratio of six per cent but attributed it to the A-Life financial scandal.
The Bank has enough assets to correct the capital inadequacy problem in a year if it is given the chance.
He urged the government to allow workers and staff of the Bank to take over the assets and deposit liabilities of BHC and operate it.
GRi
BHC workers reject government offer of 90 billion cedis
Accra (Greater Accra), 22nd January 2000
Workers of the Bank for Housing and Construction (BHC) on Friday rejected the government's offer of 90 billion cedis for payment of deposits and settlement entitlement of staff of the two liquidated banks.
The BHC and the Ghana Co-operative Bank were last Monday liquidated for poor performance.
Speaking at a news conference in Accra, Mr Ben Amegatse, Chairman of the Professional and Managerial Staff Union of the Bank, said deposits at the BHC alone as at December 1999, totalled to 85 billion cedis.
The news conference was attended by Mr. Kwame Amoa-Bosompem, Chairman of the Industrial and Commercial Workers Union (ICU) of the Trades Union Congress, Mr Lawrence Adjadoo, immediate past Managing Director of BHC, and Mr. Iddi Puyo, Chairman of the ICU local branch of BHC and about 100 members of staff.
He said the 90 billion cedis offer could not, therefore, meet the deposit and BHC staff entitlements.
Mr. Amegatse said the management and workers of the Bank have petitioned the government through the Vice-President and the Speaker of Parliament on the worker's position on the liquidation and called for immediate action.
The workers said they want the government to allow them to take over and run the Bank which, according to them, "is still liquid".
They said the new Managing Director had started "vigorous mobilisation of deposits" and his efforts had started yielding fruits.
This is evidenced by the number of new accounts opened with the Bank in the last few days and the re-activation of dormant ones.
"The new Managing Director had taken several strategic decisions all aimed at positioning the Bank well for improved performance in all the spheres of its operations."
GRi
Accra bourse marks time
Accra (Greater Accra), 22nd January 2000
The Accra bourse on Friday marked time for the first time this year after successive moderate gains, which brought the change to date to 0.5 per cent.
The All-Share Index, which remained at 740.07 points, began the year at 737.16 points. It gained 0.02 points on Wednesday.
None of the 22 equities registered a price change. There was no change in the market capitalisation of 3,211.56 billion cedis.
Offers declined by more than 100,000 in a market that was overshadowed by low volumes.
Sixteen equities posted a total of 304,750 shares as against a mere 8,200 shares traded. Only eight equities traded shares.
Total offers on Wednesday were 462,000 while shares traded on the same day were 59,200. Demand also declined by more than two-thirds from 98,150 on Wednesday to 24,750 shares.
The following are the last prices of listed equities in cedis:
ABL 470
AGC 18,700
ALW 2,489
BAT 467
CFAO 38
EIC 1,880
FML 930
GBL 1,450
GCB 770
GGL 950
HFC 750
MGL 200
MLC 150
MOGL 13,900
PAF 298
PZ 800
SCB 19,200
SPPC 150
SSB 1,988
UNIL 1,850
UTC-E 125
CMLT 420
GRi