Watchers of Ghana's banking industry could not help but admire the guts shown by Kofi Amoabeng's UT Financial Services when it acquired majority shares in the previously Malaysian­-owned BPI bank and converted it to UT Bank. After a move that was brave and audacious by all standards, the general question was whether the undoubted savvy and business acumen of Mr. Amoabeng could be brought to bear on what is arguably Ghana's smallest bank and turn it into the kind of financial behemoth that UT Financial Services is right now. It appeared that Amoabeng's group had scored a major coup when the transfer of shares and change of directors went smoothly with the Bank of Ghana approving the shift in control in near-record time. But the transition now appears to have hit a snag, not with the Bank of Ghana or any regulators, but from the minority shareholders of UT Bank who have gone to court to ask the court to compel Amoabeng and UT to purchase their shares, and have now cited Amoabeng and other directors for contempt of court. According to the minority shareholders, led by Alex Ashiagbor, former governor of Bank of Ghana, UT had agreed to purchase their shares along with the 51% shares that UT purchased from Hopaco, the previous majority shareholder. The minority shareholders, which also includes HFC Bank, claim that UT has now backed away from that agreement to buy their shares and so filed the action, asking the court to compel UT to buy them out. Originally, the minority who sued to court included SSNIT. But in an interesting development. SSNIT and three other minority shareholders have withdrawn from the action. Industry watchers have speculated that the SSNIT-led minority shareholders see a bright future ahead and want to work with UT to rebuild the bank. But the Alex Ashiagbor-­led minority shareholders are continuing with the action. But UT has responded strongly. It says that although there was an understanding even as to the purchase price of the shares, all the prospective parties, particularly the minority, were required by UT Bank's Regulations and the law to comply with the procedure for the transfer of shares. UT states that before that laid-down procedure could be invoked and complied with, it intimated to the minority that it did not wish to purchase their shares anymore. The industry experts who have been following the case in court have explained to B&FT that this procedure is called the exercise of 'pre­emptive rights', which is usually a condition that must occur before shares of many private companies are transferred. B&FT says it has learnt the Alex Ashiagbor-led minority have filed two motions for interim injunctions. The first motion complained about attempts to increase UT Bank's capital. The second motion sought to prevent the change of name. But UT has responded to say that the increase in the bank's capital (which they say is a Bank of Ghana requirement) and change of name were approved at a meeting of the shareholders. UT also claims that the minority shareholders were present at the meeting, but left the meeting abruptly claiming that once they had arrived at an agreement with UT on the price of their shares, they were no longer interested in the meeting's proceedings. UT therefore says that the meeting went ahead to pass the resolutions that had been tabled for the day, and that those resolutions have already been implemented. The contempt application, according to sources, is based on the second motion which sought to prevent the change of name. The Ashiagbor-led minority is claiming that Amoabeng and the other directors are in contempt of court because they changed the name of the company whilst that motion was pending. UT, acting by its Chief Operating Officer, Capt. (Rtd) Budu Koomson, has responded to say that the change of name happened months before the motion was filed and that the motion was seeking to prevent a thing that had already happened. When the contempt application was called in court on 12th May 2009, the presiding judge, Justice Ahmed Tanko adjourned the matter because he said that Mr. Amoabeng and some of the other persons cited for contempt had not been properly served. He therefore directed that they should be served. The plaintiffs are represented in court by Mr. Dav1d Kudoadzi and UT by Mr. Ace Ankomah. Source: B&FT