16 November 2011

Ghana: STX Deal to Start At Last...as Partners Prepare for 'Out of Court' Settlement

Partners in the STX Housing deal are gearing up for settlement, in a case in which the Ghanaian partner, GKA Airports Company Limited, is seeking to sack the Korean partner, STX Engineering and Construction Ghana Limited and STX Construction Company Limited in Seoul, in a suit before an Accra Commercial Court.

Counsel for the Plaintiff, Mr. Carl Adongo, yesterday informed the court, presided over by Justice Gertrude Torkornoo, that his client, GKA Airports Company Limited, and its Korean Partners, STX Engineering and Construction Ghana Limited and STX Construction Company Limited in Seoul, have drawn up terms of settlement, which was yet to be filed.

According to the counsel, since the last adjourned date, the partners in the STX Housing deal had met, discussed the issue before court, and agreed on the terms of settlement. If the terms of settlement appear before the court, it would be adopted and made part of its judgement.

The court, therefore, adjourned sitting to November 24, this year, for continuation.

GKA Airports Company Limited, through its Chief Executive Officer (CEO), Bernard Kwabena Asamoah, the man credited for introducing the STX housing deal to the National Democratic congress (NDC) government, initiated legal action against STX Engineering and Construction Ghana Limited and STX Construction Company Limited in Seoul, wanting the court to determine the rightful partner to execute the housing project.

Other defendants include Kook Hyun Kim, Su Jou Kim, Daniel Jung, Seong Hoon Kang, Yong Chan Kim, Im-Dong Park, Ji Hoon Hwang and Man Kang. As GKA Airports Company Limited is seeking to dismiss the Korean partners from the entire project, the Koreans have vowed to resist any attempt to forcibly remove them.

As a result, the Koreans first initiated legal action against their Ghanaian counterpart, over who owned the company, when they sued B.K. Asamoah, the Registrar-General and others for allegedly diluting the company's shares to GKA Airport's advantage, but the Fast Track High Court (FTC), presided over by Justice N.M.C. Abodakpi, adjourned proceedings indefinitely, due to incomplete documentation of the court process.

GKA Airports Limited is seeking a court declaration that by terminating the Joint Venture Agreement and Heads of Agreement, STX Construction Company Limited in Seoul renounced its membership of the 1st respondent, STX Engineering and Construction Ghana Limited.

The plaintiff is further requesting the court to declare that by failing to make direct investment in the 1st respondent, STX Engineering and Construction Ghana Limited, by way of equity contribution, the 2nd respondent, STX Construction Company Limited in Seoul, "is statutorily barred from taking part in all of 1st respondent's operations."

Additionally, the plaintiff is seeking an order of injunction, restraining the 2nd defendant, STX Construction Company Limited in Seoul, from holding itself out and/or purporting to act or discharge functions as shareholders of 1st defendant, as well as an order restraining the 3rd to 10th defendants from holding themselves as directors of STX Engineering and Construction Ghana Limited.

GKA Airports want a further declaration that the resolution, purportedly passed by STX Engineering and Construction Ghana Limited's Board of Directors, at a meeting held on August 18, 2011 to convene an extraordinary general meeting of the company, was illegal, null, void and of no effect.

The plaintiff wants a declaration that "the notices, dated August 29, 2011, and September 8, 2011 respectively, of an extraordinary general meeting of the 1st respondent to be held in the 1st respondent's conference room on October 6, 2011, at 4.00 p.m. are illegal, null, void and of no effect."

The plaintiff further wants an order of injunction, "restraining respondents from holding the extraordinary general meeting, scheduled to take place on October 6, 2011, at 4:00 p.m. at 1st respondent's conference room."

However, the defendants (Koreans) fired back, disputing the claims of the plaintiff and made counter-claims against the plaintiff.

In their affidavit in opposition, filed on October 17, this year, and deposed to by Daniel Jung, the defendants say they had not executed any transfer of its shares, neither have the shares been affected by any law or statute.

The defendants noted that STX Engineering and Construction Ghana Limited was incorporated on November 17, 2009, and the subscribers to its regulation were both STX Construction Company Limited and GKA Airports Company Limited, adding that "the 2nd respondent subscribed to 15,000 shares, whilst the applicant subscribed to 7,400 shares."

"The right of the 2nd respondent, as a subscriber to the regulations of the 1st respondent, are guaranteed and or prescribed by statute," the defendants asserted.

The project was to commence with the construction of 200,000 housing units in the country, starting with 30,000 houses for the security services, at the total cost of $10 billion.

Boardroom wrangling between the Koreans and their Ghanaian partners stalled the project, after President John Evans Atta Mills cut the sod in January 2011 for work to begin.

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