Revocation of Unibank licence was unlawful and bizarre

According to a document signed by the Deputy AG and sighted by Primenewsghana, it appears the circumstances and procedure for the revocation of Unibank's licence was not only unlawful but seemingly bizarre.

The AG in the document recounted the circumstances and procedure leading to the revocation of Unibank's licence, their preliminary observation on the matter indicated that "the foundation for the impugned decisions resulting in the appointment of a receiver for Unibank in respect of "selected assets and liabilities" and the transfer of selected assets and liability to an assuming bank, CBG, was the initial appointment of an official administrator for the bank under section 107 of Act 930. In the discharge of its obligations, the official administrator, KPMG, was bound by the provisions of section 107-122 of Act 930. The validity of actions taken during the period of official administration of Unibank has to be measured against the provisions of the statue."

"Section 114(3) requires an official administrator, not later than ninety (90) days of his appointment, to prepare and deliver to BoG a report on the financial conditions and prospect of the bank or specialised deposit-taking institution. This is what KPMG sought to do by its report dated 20th June 2018."

The letter continued to state that "It is apparent from the foregoing that revocation of licence of a bank or specialised deposit-taking institution or the appointment of a receiver are not part of the actions that may be taken pursuant to a report prepared under section 114."

"Section 122 of Act 930 enjoins official administrator to continue until the expiry of the period specified in the decision to appoint the official administrator. In the instant case, the decision to appoint official administrator for Unibank, specified the period of administration as 6 months. It is beyond controversy that the period of administration in the Unibank matter terminated by 1st August 2018, undoubtedly earlier than the statutorily prescribed period."

 

 

Receiver sues Kwabena Duffuor, others over GHc5.7bn uniBank cash

Defunct uniBank Ghana Limited under the receivership of Nii Amanor Duodoo last year sued Dr. Kwabena Duffour, HODA Holdings Ltd, Star life Assurance and 7 others at the High Court.

The plaintiff, uniBank, among other reliefs are praying the court for an order for the recovery of some 5.7 billion cedis it claims was unlawfully taken from the bank.

The plaintiff lists several assets and properties of the defendants and prays the court to restrain them from selling, disposing of or dealing with the same.

This new suit follows the dismissal of an initial one by the court due to the locus of the Receiver, Nii Amanor Dodoo to sue in his personal capacity.

The High Court, in dismissing the case had ruled that Mr. Amanor Dodoo did not have the capacity to issue a writ in his own name in the manner that it was done.

The presiding judge, Justice Jenifer Dadzie dismissed an injunction which had stalled the arbitration process, being presided over by former Supreme Court judge, Dr. Justice Dateh- Baah.

The Receiver had earlier filed an application asking the court to dismiss the counterclaim from the lawyer of the bank’s directors, Yaw Oppong, for the restoration of the license, arguing that it was “frivolous” and “lacked merit”

He also argued that the proper forum to address matters relating to revocation of licences under Act 930 is an arbitration forum and not regular litigation.

The lawyer for the bank’s Directors, however, opposed this, stating that even if arbitration was the right forum to address their concerns, it does not warrant the dismissal of the case.

The judge sustained this argument by the lawyer, agreeing that arbitration does not oust the jurisdiction of the commercial court in the matter.

“Where the law admits a preference for arbitration proceedings, any proceedings before the court should stay pending the determination of arbitration proceedings upon an application…,” she said.

The judge observed that the matters for arbitration fall within section 141 of Act 930 and includes the matter of revocation of uniBank’s license mentioned in the counterclaim.

Revocation of license

The central bank merged uniBank with other insolvent banks to form the Consolidated Bank Ghana Limited in 2018.

Announcing the consolidation of uniBank along with the other banks on August 1, 2018, the Governor of the BoG, Dr. Ernest Addison said reports from the official administrator, KPMG stated that uniBank was balance sheet insolvent.

“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.”

These claims have, however, been challenged by the bank’s directors.