Revocation of Heritage bank license was fair – BoG

The Governor of the Bank of Ghana, Dr. Ernest Addison, has refuted claims that the central bank unfairly revoked the license of Heritage Bank.

Heritage Bank lost its license after the Bank of Ghana completed its banking sector reforms in December 2018.

The majority shareholder of the bank, Seidu Agongo, recently in a statement accused the Bank of Ghana of unfairly revoking its license on grounds that he as a major shareholder, was not “proper and fit” to own a bank.

Mr. Agongo also refuted assertions that Heritage Bank was set up with suspicious capital. Seidu Agongo is currently in court over a case involving a contract he received from COCOBOD.

But Dr. Addison maintains that the Bank of Ghana used all the required rules under the Banking Act and was also transparent in revoking the license.

Background

After Heritage Bank’s license was revoked due to a suspicious stated capital according to the BoG, as well as their inability to meet the new GHc400 million minimum capital requirement, the Governor also said that, the involvement of Mr. Agongo in the ongoing trial over alleged fraud in a Cocobod fertilizer contract, meant he was unfit to hold a banking license.

The bank was absorbed by Consolidate Bank Ghana Limited, joining six other banks as part of reforms in the banking sector.

But Seidu Agongo accused Dr. Ernest Addison, of acting in bad faith when he described him as not being fit and proper enough to be a significant shareholder of the bank.

Mr. Agongo said the BoG Governor’s assertions were not backed by facts.

“As at the time of this statement, as was at the time of the Governor’s press conference, there had been no determination either by the High Court nor any other authority for that matter, that the funds derived from contracts with Cocobod are in any manner or form illegal or criminal warranting my characterization by the Central Bank as not fit and proper.”

BoG has done a ‘grave injustice’ to Heritage Bank by revoking its license – Former directors

Former Board of Directors of now-defunct Heritage Bank Limited had earlier lamented claims by the Bank of Ghana (BoG) for the revocation of the license.

In a statement sighted by citinewsroom, the former directors of Heritage Bank said the claims by the Central Bank were either “completely false or inaccurate”.

According to them, the central bank failed to adequately provide them with the necessary assistance, adding that the action by the BoG is “a terrible precedent that does not bode well for the future.”

Source: citibusinessnews