Adb has had to pay as much as 710,000 cedis so far in legal and transaction fees in a bid to roll out it’s Initial Public Offer (IPO) successfully.
[contextly_sidebar id=”HLuvPA0B6fKn4LDFB7TereFuOL7LoyVk”]Despite its monetary efforts the bank has still been unable to get the IPO through.
Documents cited by Citi Business News reveal the bank paid IC Securities, transaction advisors for the IPO a whopping 500, 000 cedis for their services while as much 210,000 cedis was paid to Messers Lithur Brew for legal services rendered for the bank.
The bank was hit with several law suits following its announcement that it wanted to go public.
Persons who had dragged it to court had questioned why the bank had failed to get parliamentary approval for the offer.
The writs were filed by the Union of Industry, Commerce and Finance Workers (UNICOF) and on behalf of Dr. Mark Assibey Yaboah by legal practitioner and MP Afenyo Markin.
There was another suit filed by UNICOF at the High Court in relation to the Employee Share Offer Plan (ESOP).
The cases three in all were filled in both the Supreme and high courts.
Lithur Brew who served as lawyer for the bank at the time they were hit with the suits initially served the bank with an invoice of 352,750 cedis for services rendered.
The bank however rejected the bill.
According to a memorandum dated October 7th, 2015 which was signed by the secretary of the executive committee of the bank Marian Larmie at a meeting held on October 6th 2015 the committee approved payments 210,000, cedis to Messers Lithur Brew and company Limited for prosecution of the case against the bank and 500,000 to IC Securities as fees for their services with respect to the IPO.
Another memorandum from the Head of Legal department of ADB Maxwell Kofi Amoakohene to the Managing Director dated October 2nd, 2015 titled revised invoice for legal professional services, Maxwell Kofi Amoakohene justified why the legal fees had been scaled down from the initial 352,750 cedis submitted by Tony Lithur.
According to the Maxwell Kofi Amoakohene the withdrawal of the plaintiff’s injunctions and substantive suits with respect of the IPO and a further discussion necessitated the review of the fees.
The breakdown of the fee showed the legal and professional fee is 200,000 cedis and filing fees is 10,000 bringing the sum total to 210,000 cedis which is VAT exclusive.
The memorandum from the head of the Legal department revealed that cases prosecuted at the Supreme Court, the Ghana Bar Association scale of fees puts the minimum fee at 150,000 cedis and maximum at 300,000.
According to the bank’s prospectus the total cost and expenses of the transaction are not anticipated to exceed 5.00% of the Offer (assuming all ADB Shares in the Offer are applied for and issued).
ADB is to pay all fees out of the proceeds of the Transaction.
Professional and Advisory Fees 2,962,483cedis, Legal due diligence 722,483 cedis, Accounting due diligence 340,000 cedis, Financial advisory 1,900,000 cedis,Brokerage Commissions and Receiving Agent Fee 7,371,402 1.85 cedis.
Regulatory Fees GSE and SEC 1,895,640 cedis and Media publicity, marketing, printing, logistics, VAT etcc at 1,250,000 cedis all this costs coming up to 13,479,525 cedis.