No Lay-Offs At HFC Bank - Republic Bank Assures Staff

Republic Bank of Trinidad and Tobago has assured that no staff of HFC Bank will be laid off after the takeover.

The bank said its acquisition track record has always shown that the profitability, products and services offered, as well as staff numbers in the institution acquired, all increased after their involvement, and the situation with HFC Bank will not be different.

Speaking to The Finder, the Director of African Operations of Republic Bank of Trinidad and Tobago, Mr Robert Le Hunte, said “there is no plan in place to reduce staff.”

He was reacting to fears in some quarters that staff of HFC Bank will be laid off after Republic Bank takes over.

He explained that as part of Republic Bank’s strategic partnership with HFC Bank, Republic Bank was directly involved in the Risk Management and E-Banking departments, and in the two departments, the number of staff actually increased by over 25%.

Mr Le Hunte emphasised that Republic Bank’s vision was to expand and grow the organisation to move the bank to a top-tier bank within the shortest possible time.

“The training, development and increasing the exposure of the staff will, therefore, be our priority,” he said.

He reaffirmed the bank’s commitment to continue the process to take over HFC Bank by following the process as outlined in the Takeover Code of the Securities and Exchange Commission (SEC).

He was happy that the Supreme Court ruling has given Republic Bank the nod to go ahead with the process of partnering HFC Bank via the MTO process.

However, he said no specific timeline has been set for this as yet.

The Supreme Court quashed an earlier decision by a commercial court that dismissed an application by Republic Bank to strike out a suit filed by HFC Bank.

An amount of GH₵5,000 was awarded in favour of Republic Bank.
Mr Le Hunte said Republic Bank invested in Ghana not to engage in legal matters but to partner with HFC in broadening and enhancing the level of banking services being offered to the Ghanaian people.

“It is my hope that with this decisive ruling from the Supreme Court, good sense would prevail and Republic Bank would be in a position to present to the shareholders the long-awaited offer," he said.

He explained that the MTO process was a transparent and internationally recognised course of action which ensures that all relevant parties have an input in the decision making.

“We are firmly of the view that the shareholders of HFC, who are the ultimate owners of the company, are the ones to make the final decision on the ownership structure of the institution, and nothing should be done to prevent them for doing so," he noted.

Mr Le Hunte said, "I have been heartened by the outpouring of support from all facets of the Ghanaian community staff at HFC Bank, the general public and members of the business community in response to the Supreme Court ruling.”

He explained that the Supreme Court ruling means that Republic Bank can continue to do the work it came to Ghana to do.

According to him, Republic Bank is looking forward to continuing to contribute significantly to the economic growth of HFC Bank, Ghana and Africa, in the coming years.

Mr Le Hunte said the offer price of GH₵1.60 per share remains valid, saying: “At this point in time, the offer price is currently approximately 20% above the present trading price, which itself is high compared to the multiple associated with other mid-sized banks.

“This in itself is an attractive multiple way above its players. So no, we are not looking to review the offer price upward at this time,” he said.

HFC Bank had on May 23, 2014 sued the Republic Bank and the Securities and Exchange Commission (SEC) for what it alleged were breaches of the SEC Code on Takeovers & Mergers in Republic Bank’s attempt to do a mandatory takeover of HFC Bank by purchasing of HFC shares held by the Union Bank of Nigeria.

HFC Bank had also applied for an interim injunction against Republic Bank and the SEC.

That suit prayed the court to allow its case against the Republic Bank, to be heard in the court, rather than let the Securities and Exchange Commission deal with the matter.

The Republic Bank had also filed a suit praying the court to dismiss the application and allow SEC to take over the matter.

Republic Bank argued that HFC Bank should have submitted a complaint to SEC to investigate the alleged wrongdoing by Republic Bank before filing the action in court.

It also stated that the action was not authorised by the Board of Directors of HFC and the fact that HFC Bank accused Republic Bank of engaging in “insider trading,” which is a criminal offence, means that the action can only be prosecuted by the Attorney-General as a criminal case and not as a civil case.

Republic Bank also argued that the action is vexatious and an abuse of the court’s process.

However, the commercial court dismissed the application by Republic Bank.

The court held that HFC Bank was justified in not first submitting a complaint to the SEC, because the SEC’s actions in the transaction raise questions of bias and impartiality.

HFC Bank, therefore, had legitimate fears that it had a very slim, if not impossible, chance of getting a fair hearing before the SEC.

However, a five-member panel of the Supreme Court, presided over by Justice William Atuguba, unanimously granted the application of Republic Bank of Trinidad and Tobago.

The Supreme Court also ordered the commercial court not to proceed any further with the case.

This means Republic Bank can proceed with their offer document to the Securities and Exchange Commission.

Source: The Finder