The Bank of Ghana has hinted it will appeal the decision of the Court of Appeal that quashed the revocation of the license of uniCredit Ghana Limited.
The central bank said it had instructed its lawyers to appeal the decision in the interest of promoting financial stability in the country.
It comes on the back of a ruling by the Court of Appeal in favour of shareholders of uniCredit Ghana Limited seeking to reverse BoG’s decision to revoke the company’s savings and loans licence in August 2019.
The court presided by Justice Suubaareh with Justice Merley Afua Wood and Justice Janapare A. Bartels as panel members said the central bank’s decision then was unlawful.
By its ruling, the Court of Appeal reversed the earlier decision of the High Court in Accra, Human Rights Court Division, dated March 18, 2021, which held that BoG followed the relevant law and due process in revoking the license of uniCredit Ghana Limited.
It will be recalled that the central bank announced reforms and a financial sector clean-up in August 2017 following a decision to revise the minimum capital requirement from GHC120million to GHC400million.
Some nine local banks, 23 savings & loans companies, 347 microfinance institutions, and 39 finance houses had their licences revoked.
After the action of the BoG, the Securities and Exchange Commission (SEC) also stepped in to shut 53 fund management companies.
Similarly, the central bank revoked the licenses of five other banks – Unibank, Construction Bank, The Royal Bank, Beige Bank, and Sovereign Bank – and announced that their good assets have been merged to form Consolidated Bank Ghana.
The affected banks included Heritage Bank Limited (HBL), Premium Bank and GN Bank.
In the case of uniCredit, investigations conducted by BoG revealed that the company was overexposed to a related party, Unisecurities Limited.
The overexposure had resulted in severe liquidity challenges and its inability to meet withdrawal requests of customers.
uniCredit Savings & Loans Limited was therefore found to be insolvent with a negative capital adequacy ratio and negative net worth following the Bank of Ghana’s assessment as of December 2018 hence the revocation of the license.
But the parent company of uniCredit, Hoda Holdings, sued the Bank of Ghana (BoG) for revoking its licence.
The shareholders, in a writ filed before the Human Rights Division of the High Court on Monday, August 19 prayed the court to quash the action of the central bank.