Cal rumpus not over • poll vote to determine contentious issues

Front Page (lead) June 6/2008

Story: Lloyd Evans & Charles Benoni Okine

An extraordinary general meeting of the CAL Bank, which was expected to provide a test case for corporate governance in Ghana, yesterday failed to resolve the contentious issues on hand.
After some of the most convincing arguments and quotations from the Companies’ Code, and each of the contending forces entrenched in their positions, the rumpus was referred for a poll vote.
The stand-off was over two major issues that were put forward by the requisitionist, Mr Afare Donkor, the largest individual shareholder of the bank. Mr Afare Donkor had sought the meeting to remove Mr Frank Brako Adu Jr both as the managing director and as a director of the bank and to appoint him (Mr Afare Donkor) a director.
On the first issue, the shareholders rejected the removal of Mr Adu Jr by a simple majority vote, a situation that occasioned Mr Donkor to demand a poll vote, which was accepted.
When it came to the appointment of Mr Afare Donkor however, the representative for the Social Security and National Insurance Trust (SSNIT), the biggest institutional shareholder of the bank, Mr Michael Addo, called for a poll vote even before the acting Chairman of the bank, Mr Robert Ahomka Lindsay, put the motion to the floor.
That notwithstanding, there was a general vote to determine a simple majority, which Mr Afare Donkor also won.
Section 170 (c) of the Companies Code of 1963 Act 179 states in part that, a member can call for a poll vote if that member or members present in person or by proxy represents not less than one twentieth of the total voting rights of all the members having the right to attend and vote on a resolution.
These scenarios compelled Mr Lindsay to seek the advice of the National Trust Holding Company (NTHC), which had to conduct the poll vote of which the results are expected to be released by close of day tomorrow (Friday).
While the issues about Mr Donkor and Mr Adu raged on, the meeting approved Dr Kobina Quansah, a seasoned banker and the first Ghanaian Managing Director of the Barclays Bank, with a simple majority general vote as a director of the CAL Bank pending the approval of the Bank of Ghana.
It also succeeded in seeking the approval of shareholders to raise an additional GH¢100 million in tranches until 2012 to recapitalise the operations of the bank that won five major laurels in the recently held Ghana Banking Awards.
The fourth resolution by the requisitionist to the effect that, “The board of directors are hereby authorised to appoint from the newly re-composed board of directors, a new Managing Director, even if in an acting capacity, and a new Chairman of the Board of Directors”, the chairman made it clear that this contravened Section 193 (a) of the Companies Code.
The subsection states that “Unless the company regulations shall otherwise provide, the directors may from time to time appoint one or more of their body to the office of managing director and to such appointment the provision of section 192 of the Code shall apply.”
Shareholders who have legal background came with their Companies Code and quoted various sections to support their arguments either for or against an issue.
Earlier before the meeting that lasted a record time of more than three hours, shareholders could be seen in groups eagerly discussing the issues particularly with reference to the appointment of Mr Donkor to the board and the removal of Mr Adu as the Managing Director.
It was clear at that period that there was not going to be a clear decision on the matter as the entrenched positions of the groups were brought to the fore during the meeting, which ended inconclusive on the two issues.
On the issue about the raising of additional capital, Mr Donkor had proposed a GH¢100 million but that was rejected by the board earlier before the meeting but in the end, the chairman announced the reversal of the position of the bank saying that “we will do with this GH¢100 million for now but when the need arises, we will come to you to raise more”.
Mr Donkor was forced to drop Mr Yoofi Grant as a proposed member of the board when things seemed to be going tough for Mr Donkor as to the number of board members the bank could have.
This easily paved the way for Dr Quansah and him (Mr Donkor) to be voted for to fill the two vacancies available on the board. The position of Mr Donkor on the board will, however, be determined by the outcome of the poll vote.
Mr Donkor had proposed the three names because he was of the view that the meeting was going to support his bid for the removal of Mr Adu as the Managing Director and a director of the bank to create room for the three, a plan which backfired and even threatened his election to the board.
The shareholders, during the deliberations, raised a number of issues including the need for the two largest shareholders to be either personally or through a representative, be on the board to ensure a fair balance of ideas to move the bank forward.
They also contended that the idea of removing Mr Adu in spite of his role in making the bank one of the icons in the financial sector was tantamount to changing a winning team, which should not be allowed to stand because of the negative consequences it might have on the operations of the bank.
Issues of legality and good corporate governance from the Managing Director and the board were also raised as shareholders called for measures that would ensure that the situation that necessitated the EGM did not recur to disrupt the operations of the bank, which was operating in a competitive market.
When asked to move the vote of thanks, Mr Donkor intimated: “My reason for all these was just to get the right things done and I believe it is a lesson for all.”
He said it was time to move on to enable the bank to grow further from its present position to greater heights.
“I did not set this bank up for nothing and I was not the founder for anything,” he ended his comments, to a resounding applause from the few shareholders who were left in the Osu Presby Church Hall.
In an interview with Mr Adu after the hectic proceedings, he said, “I have decided not to comment on the matter until the whole issues come to a conclusive end.”
“However, I can say that I will continue to do my work as expected to seriously and continuously increase shareholder value.”