The Bank of Ghana has challenged the capacity of the General Jurisdiction Court hearing the lawsuit brought against it by a shareholder of Unibank, Dr. Kwabena Duffuor.
The Central Bank on August 1, 2018, collapsed uniBank along with four other local banks on grounds of insolvency among other irregularities, to create a new bank known as the Consolidated Bank Ghana, (CBG).
In a letter to the Chief Justice, the lawyers of the Bank of Ghana, led by Frank Davies, challenged the capacity of the court, and indicated that the case must be heard by a commercial court.
The content of the letter was made known in the General Jurisdiction Court when the case was called.
Duffuor’s lawyers challenge BoG
In response, Lawyer for Dr. Duffuor, Tsatsu Tsikata, objected to the request of the letter, arguing that any challenge of the jurisdiction of the court must be done through the legal process, rather than the administrative one chosen by the BoG.
Mr. Tsikata also described the action of the BoG as forum shopping – a practice adopted by litigants to get their cases heard in a particular court that is likely to provide a favorable judgment.
Case adjourned to October 17
The presiding Judge , Justice Daniel Mensah, after hearing the arguments of the parties, adjourned the case to the 17th of October, 2018 to allow the Chief Justice take a decision on the request.
The Bank of Ghana in August created the Consolidated bank comprising five local banks.
The banks were; uniBank, Sovereign Bank, Construction bank, Beige bank as well as the Royal Bank.
The central bank among others argued that the affected banks operated with severe capital constraints.
For uniBank, the regulator’s action followed the appointment of an administrator, KPMG, to manage the bank for some six months starting from March 2018.
In Dr. Duffuor’s suit seeking to reclaim the bank, he made reference to the fact that the Bank of Ghana unjustifiably impaired debt attributable to the government and quasi-government institutions, which even included validated payment certificates issued to contractors by government.
According to Dr. Duffuor, even though the Official administrator was notified of the debts amounting to 868.9 million cedis of which 428.8 million cedis was used to offset part of the BoG’s liquidity support, the central bank, and Official Administrator could not capture it in the accounts of the bank.
Dr. Duffuor says that the amount of 760.6 million cedis impaired by the Bank of Ghana as due to the granting of new loans between September and December 2017.
Also, Dr. Duffuor says he is dissatisfied with the Bank of Ghana, and the Official Administrator for not providing any lawful basis to deny shareholders from recapitalizing the bank.
Unibank shareholders ‘cry foul.’
Shareholders of uniBank issued a statement some weeks ago in which they cited KPMG for allegedly engaging in a conflict of interest arrangement with the Bank of Ghana.
A statement by the shareholders said, “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.”
Receiver sues uniBank shareholders for GHC5.7 billion
The Receiver for uniBank, Nii Amanor Dodoo, also in September 2018 sued the 17 shareholders of the now-defunct bank over the repayment of a GHC 5.7 billion debt.
The GHC 5.7 billion debt, according to the receiver, was left by the shareholders.
The plaintiff, Nii Amanor Dodoo, contends that the defendants “have breached their duties as directors of uniBank Ghana Limited, and are liable for all the loss to uniBank Ghana ltd by their acts of breach.”
The 17 uniBank shareholders are “jointly and severally liable for the repayment of the amount of GHc5,712,623,145 to uniBank Ghana Ltd,” a portion of the suit said.
Receiver demands uniBank shareholders’ multi-million dollar assets
At the core of the receiver’s attempt to recoup a GHc5.7 billion debt from the collapsed bank’s shareholders is a plan to assume control of their multi-million dollar assets which are deemed shady.
The receiver wants a trust created for the transfer of the titles to the property said to have been acquired unlawfully for the benefit of creditors, among others.
Mr. Dodoo has thus listed 34 properties acquired in the name of shareholders or related entities that could be used to recoup the debt. Some of the properties run into millions of dollars. The most expensive of the properties, costing $250 million, is located on Accra High Street.
There is also a GHc199 million property listed at Ridge and a $120 million property at Spintex. He maintains that transactions that led to the “unlawful” acquisition of these properties should have been detected and prevented by the bank’s directors, some of which are captured in the suit.