The Court of Appeal has overturned an earlier High Court decision and directed the Bank of Ghana to restore the operating licence of GN Savings and Loans, marking a significant turning point in one of the country’s most closely watched banking sector disputes.
The appellate court, sitting as a three-member panel, further ordered that all assets belonging to the company be returned to its original owners.
The court also instructed the Receiver to hand over management of the institution to its former leadership.
The ruling represents a major development in the prolonged legal battle between GN Savings and Loans and the Bank of Ghana over the controversial financial sector reforms and clean-up exercise launched in 2018.
Background to the dispute
The troubles of GN Savings and Loans began during the nationwide banking and financial sector reforms introduced by the central bank to address insolvency and governance challenges within the industry.
On January 4, 2019, the institution was reclassified as a savings and loans company and renamed GN Savings and Loans Company Limited.
However, only months later, on August 16, 2019, the Bank of Ghana, under then Governor Ernest Addison, revoked the company’s licence and appointed Eric Nana Nipah as Receiver.
The company’s owners, led by businessman and entrepreneur Papa Kwesi Nduom, challenged the decision at the High Court in Accra on August 30, 2019.
They argued that the revocation was unlawful, unfair, malicious and unreasonable, insisting that the company was improperly targeted during the financial sector clean-up.
High Court ruling overturned
In January 2024, the High Court ruled in favour of the Bank of Ghana.
Presiding judge Justice Gifty Addo Adjei held that governance failures within the institution made it incapable of meeting its debt obligations.
The court further concluded that GN Savings and Loans failed to establish that it was solvent at the time its licence was revoked.
The High Court also rejected allegations that the central bank acted illegally or discriminatorily, maintaining that the regulator’s actions were lawful and consistent with constitutional provisions governing financial regulation.
Additionally, the court observed that other financial institutions affected during the sector reforms faced similar regulatory interventions.
Unhappy with the decision, GN Savings and Loans proceeded to the Court of Appeal, which has now reversed the earlier judgment and ordered the restoration of the company’s licence.
Nduom describes seven-year battle as painful
Reacting to the ruling, Dr. Nduom said the revocation of the company’s licence had brought immense hardship to the institution, its workers and stakeholders over the past seven years.
Addressing journalists after the judgment on Thursday, May 21, he described the period as emotionally and financially draining.
“It’s been a difficult, very, very difficult seven years,” he said, while expressing appreciation to staff members and supporters who remained loyal throughout the legal battle.
He also thanked God for sustaining him and his team during what he called an unimaginable ordeal.
According to him, the decision of the Court of Appeal offers renewed hope for the company to contribute once again to Ghana’s economic development.
Dr. Nduom further linked the outcome to what he described as a favourable political atmosphere and a changing national environment following the transition in government.
He indicated that the company would, in due course, organise a press conference to provide a full account of the challenges it faced throughout the legal struggle with the central bank.
The latest ruling is expected to reignite public debate over Ghana’s banking sector clean-up exercise, which led to the collapse or restructuring of several banks and financial institutions between 2017 and 2019.
By 1960news.com
