GHANA HOME LOANS LIMITED. VS FIRST GHANA SAVINGS AND LOANS LTD
2016
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP, ERIC K. BAFFOUR, ESQ
Areas of Law
- Contract Law
- Corporate Law
- Evidence Law
- Banking and Finance Law
- Civil Procedure
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
Ghana Home Loans sought to acquire a controlling stake in First Ghana Savings and Loans Ltd (FGSL). FGSL granted an exclusivity period for due diligence, after which Ghana Home Loans submitted a detailed offer (Ex ‘DD’). FGSL’s Board responded on 3 March 2014 (Ex ‘EE’), approving the purchase of forty million shares at GH¢0.25, amounting to GH¢10 million and a 57% controlling stake, and authorized drafting of a sale and purchase agreement. The court held Ex ‘DD’ was a valid offer and Ex ‘EE’ a clear acceptance, forming a binding contract. Relying on that acceptance, Ghana Home Loans incurred expenses, including US$69,421.07 paid to Harborough Ltd to secure US$11 million financing. FGSL later convened an AGM to seek shareholder approval for recapitalization by National Investment Bank, which the court deemed a breach. Invoking the Turquand rule and Companies Act, the court rejected defenses based on internal approvals and held that a formal SPA was not necessary. Specific performance was declined due to adequacy of damages; the court awarded special damages (US$113,233.80/GH¢293,726.93), general damages (GH¢40,000), interest from judgment, and costs (GH¢40,000).
Plaintiff claims the following reliefs endorsed on its amended writ against the defendant: i. Specific performance.
Or in the alternative Special damages of US$113, 233. 80 or its cedi equivalent of GH¢293, 726. 93 being the money spent on the due diligence exercise and the monies spent in the preparation for the acquisition of the controlling stake in the Defendant Company.
An injunction restraining the Defendant, whether by itself or by its servants or agents or otherwise howsoever, from doing the following acts or any of them, that is to say, parting or dealing with or disposing of any of its shares otherwise than to the Plaintiff.
An Injunction restraining the Defendant Company from registering the transfer of the shares to any other parties than the Plaintiff.
Damages for breach of contract.
v. Interest on any sum found due at such rate and for such period as the honourable court shall deem fit.
Further or other reliefs.
In the statement of claim that accompanied the writ, plaintiff who glorify itself as a specialist in home finance in Ghana claim to have made certain approaches to the defendant, with intent to acquiring a controlling stake in defendant’s entity.
Defendant acceded to the request of Plaintiff but granted plaintiff a three month exclusivity period on 15th January, 2014, to conduct due diligence on defendant company with view to making an offer to acquiring defendant company.
Plaintiff then asseverates that it did conduct its due diligence and expended considerable amount of money running into over hundred thousand US dollars after which it did make a definite offer to defendant to acquire a majority shares in Defendant Company on the 5th of February, 2014. To defendant the offer was duly and unequivocally accepted by the defendant on the 3rd of March, 2014. Based on the acceptance of its offer it further paid monies to the tune of US$69, 421. 07 to a company by name Harborough Ltd to solicit for the sum of 11 million US dollars to acquire Defendant Company.
Plaintiff further notes that to its dismay, defendant has called an annual general meeting and sought the approval of its shareholders for the recapitalization of defendant by its majority shareholder, being National Investment Bank (NIB). And due to that defendant seems to have resiled from the agreement it has with Plaintiff notwithstanding the remonstrations made by plaintiff.
Plaintiff then particularizes the special damage it has suffered which comes to a total of US$