Ghana’s Agricultural Bank Said to Delay IPO on Labor Issues

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Ghana’s state-owned agricultural bank delayed an initial public offering for the second time in three years amid a dispute with labor unions, according to a person with knowledge of the matter.

The Agricultural Development Bank wants more time for talks with unions and will make an announcement on Wednesday, said the person, who asked not to be identified because they aren’t authorized to comment. Workers are questioning why the ADB left its headquarters to become a tenant in a new office block and demanding answers to why ADB’s capital fell below regulatory minimums, Tony Akiasu, the chairman of a union for junior workers, said June 2.

Labor Minister Haruna Iddrisu and ADB Managing Director Stephen Kpordzih, declined to comment on Monday. Kpordzih said he doesn’t want to respond to an e-mail request he received seeking comment on allegations made by unions.

The postponement puts on hold a sale the central bank championed as a means to resolving a potential conflict of interest because of its 48 percent stake in the lender. Investors expected the offering by Accra-based ADB, which provides loans to farmers in a country that ranks second behind Ivory Coast among the world’s leading producers of cocoa, to reignite trading in a stock market where volumes have slumped more than 50 percent since 2011.

‘Bad Picture’

“The delay painted a bad picture about the bank to foreign investors who were hitherto very interested in the IPO,” Michael Otu Fiaw, a research analyst at Accra-based NDK Asset Management Ltd., which manages 420 million cedis ($96 million) in pension and corporate funds, said by phone on Tuesday. “The enthusiasm they would bring to the market if the IPO was on time is lost now.”

Employees are demanding Kpordzih step aside to allow for an investigation into the activities of management and the board, Mark Imoro, chairman of the workers’ group representing senior ADB staff, said by phone on June 10. Unions also want an independent third party to partner the Bank of Ghana in the investigations, he said.

The allegations made against the ADB and its management are “outright lies and half-truths” and the government has asked the central bank to look into the claims, the Ghanaian Times newspaper cited a statement from the company’s board May 18.

Grow Market

ADB pulled a proposed IPO in 2012 because it didn’t get final approval from the government, which owns 52 percent in the lender. The bank funds farmers, processors and traders.

An offering will help the stock exchange to grow and allow Ghanaians to hold shares in ADB, Bank of Ghana Governor Kofi Wampah said in an interview last month. It’s ADB’s responsibility to manage the IPO process, he said.

“It is very important to carry along all stakeholders that is why it is important to dialogue with the staff union,” Wampah said.

The offer price was decreased to 2.65 cedis a share from 3 cedis, while the number of shares on offer was increased to help the ADB raise about 400 million cedis, a person familiar with the transaction, who isn’t authorized to speak publicly, said on June 18.

“The appetite of Ghanaians to own shares in the bank is still high,” NDK’s Fiaw said. “Most people are only hoping the internal fighting will end soon.”

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