The Chairman of Agricultural Development Bank (ADB), Mr. Paul Koranteng has tasked the Bank of Ghana (BoG) and the Bankers Association to draw up a comprehensive code of ethics that will guide the actions of any future potential bank-to-bank takeover and merger.

He contended that a comprehensive document is needed to serve as blueprint for the banking industry that will guarantee discretion, transparency and truth which are crucial to successful investment transactions for the country's promising financial sector and their operations.

"This is necessary to ensure that, in line with best practices worldwide, the board room is used as the venue for the discussion of takeover matters, until they are ripe for putting in the public domain," Mr. Koranteng, explained to B&FT in an interview.

This is the first time the Chairman has expressed his thoughts on the matter publicly.

His call has come in the wake of Stanbic Bank's move to acquire majority shares in ADB, in a total take-over, which attracted public attention in a most bizarre manner.

The bank initially targeted the 48 percent shares of the Bank of Ghana (BoG), following BoG's decision to forfeit active participation in the banking industry.

Being government's policy to divest ownership in state owned enterprises to the private sector, Stanbic also hopes to acquire majority of government of Ghana's 52 percent shares in the ADB.

The Board Chairman described the development as hostile, which also suggested that ADB, was in distress and undermined the confidence of the staff and created a situation of uncertainty among customers.

"What happened in the ADB case should not be allowed to happen again in dealings between banks," he remarked.

Professor Gyan-Baffour, deputy Minister of Finance and Economic Planning, who also added his voice to the call, reiterated that, it is long overdue for a broad code of ethics to guide the future takeover of private corporate organisation.

"It behoves the private sector to develop a document to direct future mergers and takeovers in the country to ensure decency and transparency in the corporate sector," he mentioned.

Presently, the Securities. and Exchange Commission and the Ghana Stock Exchange oversee matters relating to takeovers and mergers of organisations listed on the bourse.

Analysts believe that absence of a detailed code of ethics on bank-to-bank takeovers and mergers could easily jeopardize the country’s fragile financial sector regarding future occurrence.

Source: B&FT