Republic Bank commits to lawful dealings

The Republic Bank of Trinidad & Tobago has expressed its commitment to the rules and regulations governing doing business in the country, as the bank awaits shareholders’ decision on its mandatory offer to take over HFC Bank.

The General Manager, Group Marketing and Communications of Republic Bank, Michelle Palmer-Keizer noted in a statement released yesterday from Port of Spain, Trinidad, that the Caribbean-based bank is concerned about some of the actions of the Board of Directors of HFC Bank as it attempts to buy-up additional shares that will see the Trinidadian bank assume control of the Ghanaian-founded bank.

She reiterated Republic Bank’s commitment to adhere to the laws of Ghana as it looks to expand its footprints in emerging markets.

The statement said: “Republic Bank has become aware of a release issued by the Board of HFC Bank in connection with Republic’s announcement of 16 April 2014 of its mandatory offer to shareholders. Republic Bank wishes to express its concern about allegations contained in the HFC Board release.

“From Republic Bank’s initial entry into Ghana in November 2012, it has consistently attempted to adhere to the rules and regulations laid down by the Bank of Ghana and the Ghana Securities and Exchange Commission; and where there has been ambiguity, Republic Bank has sought clarification and guidance from its Ghanaian advisors and the regulatory authorities.

“In November of 2012, Republic Bank Limited and HFC Bank (Ghana) agreed to the framework for the investment by Republic Bank in HFC Bank. The agreement, signed on 6th November, 2012, provided that RBL would not increase its shareholding in HFC Bank beyond 40% for a period of one year without prior approval from the Board of Directors.

“Both parties recognised that the mandatory takeover code would be triggered if Republic acquired over 30% during the one-year period, and that the process would have to be followed if the SEC’s approval was not obtained for a waiver.

“Republic has always maintained the position that the mandatory offer requirement is a legal one, which cannot be set aside simply by an agreement between the relevant company and a shareholder.

“Republic Bank values all relationships and strategic partnerships that it enters into; however, at no time will the value of those relationships supersede the laws in countries where they are operating.

“Republic Bank seeks at all times to work with regulatory authorities and act in compliance with the laws of the land, and agrees that the final decision on this matter will be made by the shareholders.
“Republic Bank assures all HFC Bank stakeholders and the public of its long-term commitment to HFC Bank, and to contributing to economic growth and development in Ghana through its investment in HFC Bank.”

Republic Bank has bid to take over HFC Bank, revising its initial offer price of GH₵1.30 per share to GH₵1.60, in an attempt to entice shareholders to tender in their shares and enable the Trinidadian bank to increase its 40% stake in HFC to its takeover target of 51%.

As of Tuesday, HFC shares were trading at GH₵1.29 per share on the Ghana Stock Exchange.

The takeover process by Republic Bank has been characterised by controversy, as the posture of some of the biggest individual shareholders of HFC Bank and the board show resistance to the takeover process -- since they find Republic Bank’s approach too hostile.

The board of directors of HFC Bank earlier this week questioned moves by Republic Bank to take over the Ghanaian bank -- accusing the Trinidadian bank of breaching a “collaborative theme” agreed between the two parties following Republic Bank’s announcement of a mandatory offer to acquire remaining shares of the bank from other shareholders.