The Securities and Exchange Commission (SEC) has commenced investigations into Agricultural Development Bank (ADB)’s Initial Public Offer (IPO).
It follows the inability of the Board of Directors of the bank to approve offer results submitted by the Financial Advisor and Lead sponsoring Broker, IC Securities.
As a result, all activities in relation to the IPO have been suspended until the outcome of the investigations.
A statement by the SEC on the latest development and copied to Citi Business News said,
“The Securities and Exchange Commission (SEC) wishes to bring to the attention of investors and the general public that it has received a petition from ADB against its IPO, following the inability of the Board of Directors of ADB to approve the offer results submitted by IC Securities, the Financial Advisor and Lead sponsoring Broker, who in turn should have submitted same to the SEC on 6th May 2016.”
It added, “Pursuant to Section 8(c) of the Securities Industry Act, 1993, (P.N.D.C.L. 333) as amended, the Director – General of the SEC has caused an investigation into the matter.”
The Securities and Exchange Commission however assured subscribers, stakeholders and the general public the matter will be dealt with swiftly to ensure fairness and equity in the securities market.
“The SEC wishes to assure subscribers to the offer, other stakeholders and the general public that it is committed to ensuring adherence to the Laws, Regulations and Rules of the capital market by all players and that the petition will be dealt with expeditiously to ensure fair and equitable dealings in securities on our market,” it stated.
Citi Business News earlier reported that ADB missed two timelines; the April 25, 2016 and Thursday, May 5, 2016 dates it scheduled to list on the Ghana Stock Exchange.
This was due to a delay in approval by government which is a majority share holder.
The Head of Marketing and Communications at ADB, Solomon Adu Atefoe in an interview said the bank was finalizing arrangements with the Finance Ministry which was representing government since it owned majority shares of about 52 percent.
“We need to seek clearance from government before the listing can take place and our financial advisors are engaging government to ensure that is done seamlessly. So as I speak to you now, we are finalising that arrangements and we will inform the public in due course,” he stated.
IPO offer and performance
ADB launched its IPO in December 2015 to raise 390 million cedis after several unsuccessful attempts.
The offer was initially scheduled to have ended in February but was extended to March 24, after the SEC approved an additional 100 million cedis.
Although there were reports of low patronage, Solomon Adu Atefoe attributed the extension of the offer period to an increase in retail purchases at the time.
Mr. Atefoe in a recent interview also told Citi Business News the offer was oversubscribed by about nine percent,
“The amount the IPO sought to raise was oversubscribed over nine percent; we sought to raise about 390 million cedis but we got over 430 million cedis. The extension period really worked as we got a lot of participation and interest across board, a lot of individuals as well as companies and individuals so the extension was very good us,” he noted.
Citi Business News understands the proceeds from the IPO will be used to pay off the BoG’s shares, finance the expansion of branches of the bank as well as improve IT infrastructure.
