Ghana's Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) has fined Re­pub­lic Bank for breach­ing that coun­try's takeover code.How­ev­er, the T&T bank has been cleared of al­le­ga­tions of in­sid­er trad­ing which sur­faced last year dur­ing the bank's ac­qui­si­tion of HFC shares from the Union Bank of Nige­ria.Ac­cord­ing to news­pa­per re­ports from Ghana, the al­le­ga­tions were made in Jan­u­ary by two di­rec­tors of HFC Bank who called on the SEC to in­ves­ti­gate their claims be­fore be­gin­ning the process of a manda­to­ry takeover of HFC bank be­gan.

Last May, HFC Bank sued Re­pub­lic Bank and Ghana's SEC claim­ing there had been breach­es of the SEC code on takeovers and merg­ers in the at­tempt to do a manda­to­ry takeover by pur­chas­ing HFC shares held by the Union Bank of Nige­ria. How­ev­er HFC Bank was or­dered by Ghana's Supreme Court present their ac­cu­sa­tion of in­sid­er trad­ing­to to the SEC for in­ves­ti­ga­tion.The SEC has now ruled that Re­pub­lic Bank un­in­ten­tion­al­ly breached some rules of the Takeover Code by not re­vert­ing to the SEC for ap­proval.

The SEC's code on takeovers and merg­ers states: "No per­son shall make an of­fer to ac­quire shares or vot­ing rights of a pub­lic com­pa­ny which to­geth­er with shares or vot­ing rights if any held by such per­son or by per­sons act­ing in con­cert en­ti­tle such per­son to ex­er­cise ef­fec­tive con­trol in the tar­get com­pa­ny with­out com­ply­ing with the takeover pro­ce­dures..."

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The SEC said the al­le­ga­tion of in­sid­er trad­ing could not be sub­stan­ti­at­ed since Re­pub­lic Bank du­ly dis­closed the price per share on of­fer and the board of HFC Bank and the Bank of Ghana alo ap­proved the pur­chase of the ad­di­tion­al shares.It fur­ther found that Re­pub­lic Bank did not use any non-pub­lic price sen­si­tive in­for­ma­tion to ac­quire the shares from Union Bank which were avail­able to the pub­lic. The SEC said the bank sought the ap­proval of HFC Bank's board, as well as the Bank of Ghana to ac­quire the shares.

Re­pub­lic Bank, which has ac­quired an over thir­ty per cent stake in HFC Bank, is re­quired by the Takeover Code of the SEC to make a manda­to­ry of­fer to all the share­hold­ers of HFC. How­ev­er, that process has been stalled by sep­a­rate le­gal chal­lenges from HFC's man­age­ment and share­hold­ers of HFC which have been dis­missed by Ghana's Supreme Court.With the lat­est claims now out of the way, the manda­to­ry takeover process is ex­pect­ed to re­sume.