Dr. Paa Kwesi Nduom
The Court of Appeal has ordered Bank of Ghana (BoG) to restore the operating licence of GN Savings and Loans Limited after it upheld an appeal against the decision of a High Court which affirmed the central bank’s 2019 decision.
The appellate court has also ordered the BoG to return all assets to GN Savings and Loans while the receiver, was also ordered to return the management of the company to its previous managers.
A three-member panel of the court gave the order yesterday after it overturned a 2020 decision of a High Court which said BoG’s revocation of the company’s operating licence was not illegal or discriminatory.
Insolvency
GN Bank was reclassified as a savings and loans company on January 4, 2019, and subsequently renamed GN Savings and Loans Company Limited.
However, the Bank of Ghana, on August 16, 2019, revoked the company’s operating licence for being insolvent and appointed Eric Nana Nipah as its receiver.
Suit
On August 30, 2019, Chairman of Groupe Nduom, Dr. Paa Kwesi Nduom, sued the BoG and two others over the revocation of the licence of GN Savings and Loans Company Limited.
The suit, which was filed jointly by Coconut Grove Beach Resort and Conference Centre Limited and Groupe Nduom (GN) Limited, is challenging the decision of the central bank to declare GN Savings and Loans Company insolvent leading to the revocation of its operating licence.
The suit had challenged the issue of insolvency claim by the BoG, saying contrary to the central bank’s claims, a fair, truthful, just and independent assessment of GN Savings and Loans’ books would show it was very solvent “and particularly, that the value of Gold Coast’s government infrastructure project portfolio, running in excess of GH¢2.2 billion in addition to other assets available to Groupe Nduom, could support the GN Savings and Loans to far exceed the value of its liabilities.”
They also want an order of certiorari, quashing the decision in the notice issued by BoG which declared GN Savings and Loans Company insolvent and, consequently, revoked its licence to operate as a specialised deposit-taking institution.
Again, the suit is seeking an order on BoG to restore to the company its licence to enable it to continue operating as a specialised deposit-taking institution.
It also wants an order on the receiver of the company “to submit the possession, management or control of the assets, operations and other activities of the company to its shareholders or persons who, immediately before August 16, 2019, were in possession, management or control of such assets, operations and activities.”
Decision
The court, presided over by Justice Gifty Addo Adjei, delivering judgement on the case, said the central bank was right when it revoked the licence because it had become apparent that it was unable to meet its debt obligations due to poor governance structures.
The court said the applicant had not been able to satisfy the court that at the time of the revocation of its licence, it was solvent and able to meet its debt obligations.
Justice Addo Adjei said the claim by the applicants of unreasonableness coupled with malice and violation of existing laws in the process of the revocation was unfounded.
On the issue of discrimination, the court concluded that the applicants were not discriminated against since other entities suffered a similar fate as that of the applicants.
By Gibril Abdul Razak