Shareholders of uniBank led by Dr. Kwabena Duffuor have sued the Bank of Ghana over its “arbitrary and capricious” decision to revoke the license of the indigenous bank.
The shareholders are praying the High Court to place an injunction on the BoG’s decision to revoke its license and restore it into private hands.
uniBank was one of five local banks which was merged into the Consolidated Bank of Ghana a few weeks ago over alleged regulatory breaches.
In their statement of claim, the plaintiffs are demanding:
“An order of injunction restraining the Defendant from expropriating uniBank by its purported vesting of “good assets and liabilities’ of uniBank in Consolidated Bank Ghana Limited and the revocation of the license of uniBank
“A declaration that the license purportedly granted to the Consolidated Bank Ghana Limited was not granted in accordance with Act 930 and is null and void
“A declaration, consequent to ii) above that “good assets and liabilities of uniBank, including deposits of depositors, cannot be lawfully vested in Consolidated Bank Ghana Limited
“An order of injunction restraining the Defendant from arbitrarily and capriciously impairing almost the entire loan book, including debts of Government and quasi-Government institutions and shareholders’ advances in the accounts of uniBank, to justify its purported revocation of the license of uniBank
“A declaration that the purported revocation of the license of uniBank is null and void, being in breach of Articles 23 and 296 of the 1992 Constitution of the Republic of Ghana
“A declaration that the purported revocation of the licence of uniBank constitutes unlawful expropriation of the properties, of the Plaintiffs and other shareholders of uniBank in breach of Articles 18 and 20 of the 1992 Constitution of the Republic of Ghana
“An order of mandatory injunction requiring the Defendant to restore uniBank to private management and shareholding
“Any other relief(s) which this Honourable Court deems fit or considers just.”
Background
On August 1, 2018, the Bank of Ghana announced that it has taken over the management of Royal Bank, Beige Bank, Sovereign Bank, The construction Bank and unibank and merged them into the Consolidated Bank Ghana. Government has committed 450 million cedis to support these banks.
Announcing the move, the governor of the Central Bank Ernest Addison noted: “Beige, Sovereign and Construction Banks obtained their licenses under false pretenses using fictitious and nonexistent capital”.
The development comes as the Construction Bank voluntarily folded up its Ghana operations on Tuesday July 31,2018.
The Central Bank increased the minimum capital requirement for banks from GH¢120 to GH¢400 million to improve stability in the banking industry whilst growing the industry.
Analysts and market watchers believe few but larger banks will help accelerate the country’s economic growth quickly since they can underwrite big ticket transactions as well as remain liquid and stronger. The few but stronger banks they believe will also help to reduce cost of credit, access to credit, non-performing loans, amongst others.
There are about 24 and 19 universal banks in Nigeria and South Africa, compare to the 34 banks in Ghana though South Africa and Nigerian economies are far bigger than Ghana. However, there are foreign banks with representative offices in these two and populous countries.
Source: Ghana/Starrfmonline.com/103.5FM
