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The shareholders of GN Savings and Loans are praying the High Court
to order the Bank of Ghana (BoG) to restore their specialised
deposit-taking licence.

The prayer was contained in the written address that the lawyers filed on behalf of the shareholders.

“These actions were taken pursuant to Section 123 (1) of the Banks
and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which
requires the Bank of Ghana to revoke the licence of a Bank or
Specialised Deposit-Taking Institution (SDI) where the Bank of Ghana
determines that the institution is insolvent”, the revocation notice
stated.

According to counsel for the shareholders, Justice Srem-Sai, the BoG
failed to take the total indebtedness of the government to Groupe Nduom
into account in its evaluation of GN Savings’ books.

“BoG had failed to take into account the relevant factors that it
ought to”, the lawyers argued in their address which was filed on April
14, 2020.

They also argued that the BoG “has come to a conclusion which no
reasonable person who is seized with all the relevant facts would have
come to.”

Affidavit in support

In his affidavit filed on August 30, 2019, Dr Nduom on his part told
the High Court that the government and its ministries, department and
agencies owed the GN Savings more than GH¢ 600 million and not the GH¢
30.3 million that the BoG stated in the revocation notice.

“The Bank of Ghana and the Minister of Finance deliberately
diminished or distorted the total indebtedness of the government and its
MDAs to the Groupe Nduom so as to enable the Bank of Ghana to revoke GN
Savings’ licence”, Dr Nduom stated in his affidavit to the Court.

Meanwhile, an applicant by the lawyers for the Bank of Ghana and the
Attorney-General to have the case referred to compulsory arbitration was
dismissed by the Court in December 2019.

A further application by Bank of Ghana’s lawyers to have the case
stayed pending an appeal they had filed in the Court of Appeal was also
dismissed as having “failed to satisfy the Court of such special
circumstances warranting a stay”.

The order by the Court that the parties should file their respective
addresses is a sign that the case which is running into its eighth month
is about to see its end in the High Court.
Written address

In a 39-paged written address in support of the originating motion on
notice for various orders for the enforcement of the fundamental human
rights of the applicants, counsel argued that all evidence pointed to
the fact that GN Savings was, as at the time of BoG’s decision, truly
solvent; and BoG did not take into account all
the relevant factors before concluding that GN Savings was insolvent.

“In this regard, the applicants contend that not only did BoG fail to take into
account all GN Savings’ assets before concluding on its solvency, but also that
there was a malicious design by the respondents between and among
themselves to supress the value of GN assets so as to enable them to come to the
pre-determined conclusion that GN Savings was insolvent,” counsel submitted.

What follows from here, therefore, is a summary of some of the key
factors that BoG and the Minister of Finance should have taken (but
have, either by neglect or refusal, failed to take) into account before
coming to a decision on GN Savings’ solvency.

According to the applicants, independent assessment of their books
showed they were solvent adding that “all this notwithstanding, BoG,
which has not conducted any known independent, fair or truthful
assessment or evaluation of the GN Savings’ books – assets and
liabilities – was able, quite bizarrely, to come to a conclusion that
GN Savings was insolvent and, consequently, revoked GN Savings’ licence on
August 16, 2019.”

“The Applicants’ argument, therefore, is that BoG has failed to
conduct a true, fair and independent assessment of GN Savings’ books –
matching the value of its total assets against the value of its total
liabilities. And, indeed, if BoG had
conducted a proper, true, fair and independent audit into the books of GN
Savings, it would have known or come to the obvious conclusion that GN Savings
was solvent and, therefore, capable of meeting its debt obligations as at the time
that BoG revoked its operational licence,” the address pointed out.

Counsel further submitted that by revoking the licence of GN Savings and going
ahead to appoint a Receiver to liquidate or wind it up without complying with
the tenets of administrative justice, and failing to take into account matters of
fact
which had been acknowledged by the BoG and the Minister of Finance
themselves in correspondence captured on the record, the respondents
have, are or are likely to deprive the applicants their right to the
property in the GN Savings.

According to the applicants, the BoG’s conclusion that GN Savings was
insolvent has no basis at law or in fact. “Rather, we have demonstrated
that the decision was, at best, reckless, fraught with stark malice and
in self-evident violation of basic public law rules. We have showed in
the affidavit and the exhibits attached (refer to the schedule below)
that GN Savings was not only solvent, but also that it has assets far
more than its total liabilities,” counsel added.

Citing authorities to buttress its argument, counsel is accordingly
praying the court to grant its reliefs because the applicants had amply
demonstrated the respondents, who were mandated by law to ensure
businesses thrived; acted unfairly and capriciously leading to the loss
of 2,840 jobs.

Revocation

On August 16, 2019, the BoG revoked the specialised deposit-taking
licences of over 20 savings and loans companies. This included GN
Savings and Loans Company Limited. The reason which the BoG gave for the
revocation was that GN Savings was insolvent.

However, on August 30, 2019, the shareholders of GN Savings filed a
case at the High Court to challenge the BoG’s decision. The defendants
in the case are the BoG, the Minister of Finance, the Attorney-General
and the Receiver of GN.

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