ormer Governor of the Bank of Ghana and major shareholder of the
defunct uniBank Ghana Limited, Dr Kwabena Duffuor, has sued the central
bank over the revocation of uniBank’s operating licence.
In the statement of claim sighted by Myjoyonline.com, Dr
Duffuor wants the High Court to order an injunction “restraining the
[Bank of Ghana] from expropriating uniBank by its purported vesting of
‘good assets and liabilities’ of uniBank in Consolidated Bank Ghana
Limited and the revocation of the licence of uniBank.”
He also wants a declaration that the licence purportedly granted the
Consolidated Bank “was not granted in accordance with Act 930 and is
null and void.”
uniBank’s operating licence was revoked on August 1, 2018, and along
with four other banks, merged into the Consolidated Bank Ghana Limited.
The regulator explained that the consolidation of uniBank, Sovereign
Bank, Royal Bank, The Beige Bank and Construction Bank became inevitable
following liquidity challenges and breach of regulations by some of the
banks.
For uniBank, the Bank of Ghana Governor, Ernest Addison, explained that
the indigenous bank’s Capital Adequacy Ratio (CAR) fell below 50% of the
required minimum of 10% (i.e. below 5%).
According to the Bank of Ghana, the establishment of the Consolidated
Bank is meant to protect Depositors funds, strengthen the financial
system and rid the banking sector of fraud. The Bank of Ghana had
mentioned, for instance, that Beige Bank and Sovereign Bank obtained
operating licences by false pretences.
Before the revocation of uniBank’s licence on August 1, 2018, the Bank
of Ghana appointed international audit firm, KPMG to ascertain the true
financial condition of the bank, protect depositors’ funds and explore
how the bank could be returned to viability within a period of no later
than six months.
According to the Bank of Ghana, “KPMG’s reports confirmed, based on a
detailed review and validation of the financial condition of uniBank
that the bank was balance sheet insolvent at the time of their
appointment as official administrator and remains so. As official
administrator, KPMG made efforts to ascertain the assets and liabilities
of the bank and evaluated options for turning around the bank’s
fortunes.”
The Bank of Ghana further explained, ‘KPMG, however, found that the
bank’s operations are not sustainable. Among other things, the bank’s
interest income and other sources of income are insufficient to cover
the associated cost of funds of underlying borrowings and liabilities,
as well as overheads of about GH¢0.31 billion per annum.”
Dr Kwabena Duffuor
Dr Duffuor in his claim wants the High Court to declare that the
purported revocation of the licence of uniBank is “null and void, being
in breach of Articles 23 and 296 of the1992 Constitution of the Republic
of Ghana.”
Before the suit dated August 20, shareholders of uniBank had issued a
statement in which they cite KPMG for allegedly engaging in a conflict
of interest arrangement with the banking regulator.
In a statement issued on Monday, August 20, 2018, the Shareholders
state: “The recent appointment of KPMG as the Receiver in respect of
some assets of uniBank and four other banks shows KPMG seeking to
benefit from the report that it provided to the Bank of Ghana through a
further paid engagement, a clear conflict of interest situation which
does not put KPMG in a good light.”
Meanwhile, Dr. Addison said recently at the 18th Working Luncheon of the
Ghana Association of Bankers (GBA) that the decision to collapse some
five troubled banks was a painful decision.
According to the Governor, he had a personal relationship with the
Managing Directors of the some of the banks that he had to withdraw
licences from.
Dr Addison states that he took the drastic action in the larger interest of the banking sector and the economy.
