Home » Bank linked to Ghanaian serial investor Daniel Ofori halts $42.9-million rights issue

Bank linked to Ghanaian serial investor Daniel Ofori halts $42.9-million rights issue

The injunction filing underscores minority shareholders' desire to safeguard their interests and ensure a fair and transparent capital-raising process

by Mfonobong Nsehe
Daniel Ofori

CalBank, a commercial bank partly owned by Daniel Ofori, a Ghanaian businessman who ranks as the richest investor on the Ghana Stock Exchange, has suspended its planned GHS600 million ($42.9 million) rights issue after a minority shareholder filed an injunction.

The unexpected move comes after weeks of anticipation surrounding the capital raise program. According to a May 14 announcement to the Ghana Stock Exchange (GSE), the suspension follows the filing of an injunction by minority shareholders, specifically targeting the allotment of shares. Court hearings are scheduled to commence this week.

CalBank acknowledged the disruption caused by the injunction and confirmed the temporary suspension of remaining capital raise processes, particularly share allotment. They are actively engaging with regulators, including the Securities and Exchange Commission, to find a swift resolution.

CalBank rights issue on hold amidst injunction application

In late March, the Accra-based lender offered existing shareholders the right to purchase additional shares at a fixed price of GHS0.29 per share, aiming to raise GHS600 million and bolster its tier-1 capital adequacy ratio.

The fundraising effort, however, has sparked investor concerns. Some minority shareholders view the rights issue as dilutive to their ownership stake, potentially diminishing their influence over the bank. 

CalBank has confirmed a temporary hold on the share allotment process due to a court injunction application filed by a minority shareholder group. Hearings and filings are expected to begin in mid-May, with a subsequent court decision on the injunction. The bank will provide an update following the court’s ruling.

Background on CalBank and Daniel Ofori’s stake

Founded in 1990, CalBank caters to a diverse clientele, including corporations, high-net-worth individuals, NGOs, SMEs, and retail customers. Prominent Ghanaian businessman Daniel Ofori holds a 3.9-percent stake in the bank.

Daniel Ofori is renowned for establishing Ghana’s leading apparel retailer, White Chapel Ltd., and serves as chairman and CEO of its parent company, White Chapel Holdings. He also holds board positions in various other companies.

Injunction raises concerns for investor confidence

The injunction filing underscores minority shareholders’ desire to safeguard their interests and ensure a fair and transparent capital-raising process.

Analysts, investors, regulators, and the Ghanaian banking sector are keenly watching developments. CalBank’s response to the injunction will be critical in restoring investor confidence and maintaining stability for future growth.

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