Trouble At ADB

The ADB building spotting the ‘ADB HOUSE IS NOT FOR SALE…KEEP OFF’ notice. (INSET) Steven Kpordzi – ADB Boss

Tension is brewing at the Agricultural Development Bank (ADB) between employees and management of the financial institution.

This follows the sale of the Bank’s head office – which is located along the Independence Avenue at Ridge in Accra – under very bizarre circumstances.

But management of the state-owned development and commercial bank remains tight-lipped on the issue, in spite of agitations by some concerned staff.

Head of Public Relations Unit at ADB, Daniel Koomson, and his deputy, Samuel Coleman, both declined comment when DAILY GUIDE contacted them, even though sources said management had been meeting the workers’ union over some of their concerns.

Instead, the two senior officials of the bank said it (bank) would respond to the issues at the appropriate time, which is most likely going to be today.

Reports, however, indicate that the two-storey office complex had been sold for $10 million whilst management of the bank has now rented a new office space located in the Accra Financial Centre (AFC), about a mile away from the old ADB head office.

Ironically, the bank is paying GH¢1 million per month as rent to owners of the AFC for the new office, excluding utility bills.

Meanwhile, ADB is said to be having a 10% stake in the AFC building, raising issues of financial impropriety.

Accra-based Joy FM quoted management of the bank as defending the decision, insisting that it was a prudent one because about 40% of the head office staff were housed in other buildings in the city.

This, it said, meant that utilities were paid separately and other rent charges were borne by the bank.

‘The managers believe bringing all the staff under one roof is cost-efficient, even if they were unable to state exactly how much savings is being made. They said when the valuation of the ADB headquarters was done, the property was valued at GH¢17 million but a competitive bidding earned the bank $10 million. They, however, say the deal is yet to be concluded,’ the Joy FM report stated.

The story also pointed out that management sources insisted that the claim that the ADB land used for the construction of the Accra Financial Centre was worth $10 million was untrue and that the land was valued at about $2.5 million.

Aside that, staff of ADB are said to have raised issues concerning an amount of GH¢600 million they had discovered in the bank’s books as unrecovered loans which could affect its operations.

ADB, which used to occupy the fifth position on the list of 28 best performing banks in the country, now ranks 20th, trailing behind several others.

It is for this reason that the disgruntled workers and the union are pushing for the removal of the managing director of the bank, Stephen Kpordzih, and dissolution of the Board to make way for a forensic audit of the activities and operations of the bank.

As at April 2010, ADB was the leading financial institution in agricultural financing in Ghana, responsible for 35% of the total bank industry financing of the sector.

In September 2010, the bank was recognised as Bank of the Year at the Africa Investor Agribusiness Awards in Durban, South Africa – the first institution so recognised at this annual event.

The total assets of the institution at the end of December 2011 were valued at approximately US$683.6 million (GH¢1.21 billion) but now struggling to catch up on the list of best performing banks in the country.

Minority in Parliament
Meanwhile, the minority caucus in Parliament has threatened to sue the bank if it fails to seek parliamentary approval before floating its shares.

‘…If steps are not taken to seek prior parliamentary approval, the Minority shall proceed to restrain you and your assigned agents, body or authority from going ahead with the said transaction without recourse to you,’ a statement issued by the New Patriotic Party (NPP) and signed by a solicitor for the party, Alex Afenyo Markin, indicated.

The Securities and Exchange Commission (SEC) recently gave ADB the approval to go ahead and offer its shares to the public.The bank is expected to offload a little over 100 million shares to the public by the end of this month.

Proceeds from the offer are expected to expand the bank’s operations.

However, the NPP pointed out that the intention of the bank to float shares and participate in trading on the Stock Exchange Market ‘requires parliamentary approval under Article 181 of the 1992 Constitution.’

Afenyo Markin said government owns 52% of the shareholding, with the remaining 48% held by the Financial Investment Trust on behalf of the Bank of Ghana.

‘Over 50% of the shares of the bank is owned by the people of Ghana represented by the government and the remaining in the name of the Bank of Ghana, although there is no evidence on record that said shares were paid for by the latter.’

It cautioned, ‘As much as the intention of the bank and its management to go public is a laudable one, it cannot override an express constitutional provision, cabinet approval notwithstanding.’

By Charles Takyi-Boadu

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