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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

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).

JUDGMENT