Accra, Ghana, January 11, 2019//-A renowned economist and Professor at the University of Cape Coast (UCC), John Gatsi, has observed that the Ghana Amalgamated Trust (GAT) was created to capture the five struggling local banks it is being investing in.
These banks which went to GAT for support to enable meet the Bank of Ghana’s GHC400 million minimum capital requirement which elapsed on December 31, 2018.
The banks are ADB, NIB, OmniBank/BSIC, Universal Merchant Bank (UMB) and Prudential Bank.
GAT as investor is not merely supporting to raise these banks from trouble but to capture the local banks and this maybe described as vulture investment whose end game is to takeover the local banks, Prof Gatsi said.
He explained that GAT as an investor would have both ordinary and preference shares and the preference shares will not be cumulative. This further means irrespective of the conditions of the banks, the investor (GAT) must pay the interest on the investment.
Another serious provision is that GAT has the put option that is to sell it shares at anytime until fiveyears. This will likely to make GAT majority shareholder of these local banks, according to him.
Prof Gatsi said the purpose of any governmental support is derived from their past contributions to the economy so as to strengthen them to continue to do so.
Discussing banking sector developments and the GAT on Joy News morning show this week, Prof Gatsi explained that the idea to support local banks was late but in the right direction.
He explained that the local banks are being supported because of their long history of providing banking services, nurturing of businesses, job creation, among others to the growth of the economy.
Among the banks to be supported is Universal Merchant Bank with banking services since 1972
Prof Gatsi, however questioned the appropriateness of how the GAT was formed without parliamentary approval.
He explained further that contrary to explanation given by the Ministry of Finance about the support, GAT is Created as an investor which has already entered into investment agreement duly signed with the local banks.
Prof Gatsi explained that Prudential, UMB and GN especially which has presence in remote areas of the country deserve some support. Thus, the purpose of GAT should not be buying out original owners through vulture capitalism.
The unfortunate thing is that the deal was closed in a manner that appeared you sign or you are collapse.
He therefore called on Parliament to show interest in how GAT was created as a public entity but invest in local banks as vulture fund killing private investment of Ghanaians.
Prof Gatsi demanded more disclosures and names of the private pension funds and declaration that the package is not a silent takeover of local banks.
African Eye Report
