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The Court of Appeal has ordered the Bank of Ghana to reinstate the operating licence of GN Savings and Loans, overturning a previous High Court decision that had upheld its revocation.
A three-member panel directed that all assets of the bank be returned to their original owners and that the Receiver hand over management to the company’s previous leadership team.
The ruling is a significant development in the long-standing legal dispute between GN Savings and Loans and the Bank of Ghana, stemming from the controversial banking sector clean-up that began in 2018.
GN Savings and Loans was reclassified as a savings and loans company on January 4, 2019, and renamed GN Savings and Loans Company Limited. Seven months later, on August 16, 2019, the Bank of Ghana, under former Governor Ernest Addison, revoked its operating licence and appointed Eric Nana Nipah as Receiver.
The company’s owners, led by Papa Kwesi Nduom, challenged the revocation at the High Court in Accra on August 30, 2019, calling the action unlawful, malicious, and unreasonable.
However, on January 24, 2024, the High Court, presided over by Justice Gifty Addo Adjei, ruled in favour of the Bank of Ghana. The court found that governance deficiencies had left GN Savings and Loans unable to meet its debt obligations and that the company had not proven its solvency at the time of licence revocation.
Justice Addo Adjei also dismissed claims that the Bank of Ghana acted illegally or unfairly, noting that the regulator’s actions were lawful and in line with Article 130 of the 1992 Constitution. Allegations of discrimination were also rejected, with the court pointing out that other financial institutions affected by the banking reforms faced similar regulatory measures.
Despite this ruling, GN Savings and Loans maintained that the revocation violated existing laws and appealed, resulting in the Court of Appeal’s recent decision to restore its licence.
Story by Efua Nessa