Ghana: Guinness Ghana Brewery in court over acquisition of Ghana Brewery

Mr. Joe Aboagye Debrah, the Chief Executive and Founder of ThinkGhana has sued the Securities Exchange Commission (SEC) at the Accra Fast Track Court to compel it to investigate Guinness Ghana Brewery (GGBL)'s so-called acquisition of Ghana Brewery Limited (GBL), AllAfrica Global Media and Public Agenda posted on March 20.

Mr. Debrah is also pleading with the court to order the probing of all major actors in the acquisition process in a bid to determine whether Ghana's securities laws have not been breached and whether investor's interests have been protected by the regulatory bodies.

If the case is heard, it would be the first time in Ghana's legal history that the courts of Ghana have an opportunity to comment on the state of Ghana's security laws. The case comes in the wake of the Enron, Worldcom, Parmalat and Lifedoor financial scandals.

In a writ filed on March 7, 2006 Mr. Debrah said on December 18, 2005, he filed a complaint with the SEC in respect of the takeover by Guinness Ghana Limited (GGL) which later changed its name to Guinness Ghana Breweries Limited (GGBL).

In the complaint, he demanded an investigation into the acquisition of GBL by GGBL and the role played by all major actors in the process.

But on January 16, 2006, the SEC wrote to him stating that the complaint was a catalogue of unproven allegations and was without merit and declined to investigate futher. He argues that the SEC has a legal duty under section 9 of Act 590 to investigate the complaint in order to make a determination whether it is unmeritorious.

The SEC also has a legal duty under the Securities Industry Law, 1993 (PNDCL 333) to regulate the securities industry of Ghana and to assure compliance with the law, rules and regulations of the securities industry, since it is the only public body tasked with regulating the securities industry in Ghana and cannot abdicate its responsibilities to any other entity.

Mr. Debrah argues further that by the Ghana Stock Exchange (GSE) 's rules and according to the Securities and Exchange Commission Regulations, 2003 (LI 1728), all listed companies have a duty to file quarterly financial reports with the GSE and copies lodged with the SEC as appropriate.

But in the run up to the takeover of GBL, GGBL failed to file its 1st quarter financial results 2004 by the legally stipulated deadline of October 2003, which is a breach of LI 1728

He said GGBL continued to issue press releases on the GSE to the effect that it has merged with GBL and also published through the media to cement that wrong impression in the minds of unsuspecting shareholders and investors.

He says the publication of false and untrue information on the stock market is a breach of the Securities Industry Law, 1993 (PNDCL 333). According to him, a search at the Registrar-General's Dept. revealed that the said entity, Guinness Ghana Brewery Limited does not exist and was not even registered in compliance with the Registration of Business Names Act, 1962 (Act 151). He is therefore asking the court to compel the SEC and GSE to apply all the sanctions under law to all defaulters.

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