uniBank takeover case adjourned

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The legal tussle in the aftermath of the collapse of uniBank Ghana Limited, which has merged with four other indigenous banks into an entity known as Consolidated Bank Ghana, has been adjourned to October 17, 2018, by an Accra High Court.

Former Finance Minister under the erstwhile National Democratic Congress (NDC) administration, Dr. Kwabena Duffuor, had sued the Bank of Ghana (BoG) for revoking the operating licence of uniBank Ghana Limited.

But the case, which is before an Accra High Court (General Jurisdiction Division), has been put on a temporary hold, as the court awaits a directive from the Chief Justice, Justice Sophia Akuffo as to whether it has the jurisdiction to hear the matter.

The adjournment was occasioned by a letter written to the Chief Justice by the legal team of BoG, led by Frank Davies, who contended that the case ought to be heard by a commercial court and not a court with general jurisdiction.

The letter coincides with an application filed by lawyers of the Central Bank praying the court to set aside the writ of summons and the statement of case of the plaintiffs.

The plaintiffs had already filed their affidavit in opposition to the application and lawyer Frank Davies and his legal team were expected to move the application.

Tsatsu Tsikata, leader of the legal team for uniBank and Integrated Properties Limited, took exception to the letter, saying it sets a bad precedent.

He stated that lawyers for BoG, at the last adjourned date, prayed the court to adjourn the matter to give them a few days to put their house in order and on a day they were expected to move their application, they draw the attention of the court to a letter to the Chief Justice.

He also expressed concern about failure on the part of BoG’s lawyers to furnish them with a copy of the letter written to the Chief Justice.

He averred that the letter cannot and should not occasion an adjournment and implored the court to go ahead and hear the matter.

Mr. Tsikata averred that the proper way for his colleague lawyer to approach such a matter was to come before the court with an application to argue for a change in court instead of writing to the Chief Justice.

He added that the instant case is of urgency, as the Central Bank had handed over the assets of the directors and shareholders of uniBank to an illegal entity known as Consolidated Bank Ghana.

The court, presided over by Justice Daniel Asiedu, said he had received a copy of the letter and would at this stage wait for a directive from the Chief Justice before continuing with the case.

He subsequently adjourned the matter to October 17, 2018, by which time the Chief Justice would have given her directive.

10 things to know about BoG’s takeover of uniBank

The BoG, on August 1, 2018, revoked the licences of five banks and merged them into an entity known as Consolidated Bank Limited.

The BoG claimed some of the affected banks procured their operational licences through dubious means.

The five banks are the Royal Bank, Beige Bank, Sovereign Bank Limited, Construction Bank and uniBank Ghana Limited.

Dr. Ernest Addison, BoG Governor, explained that efforts by the banks to overcome financial difficulties proved futile which worsened their plight.

He said uniBank and Royal Bank were identified during the asset quality review update in a 2016 exercise to be significantly undercapitalized.

The two banks subsequently submitted capital restoration plans to BoG, which failed to return them to solvency and compliance with prudential requirements.

Subsequently, Dr. Duffuor, a former governor of the Central Bank, who is a major shareholder in the bank, in a suit filed at an Accra High Court, averred that the decision of BoG to merge the bank with four other distressed local banks was not taken appropriately in accordance with Act 930 and therefore null and void.

A suit, which was filed together with Integrated Properties Limited of Top Base in Gbawe, is seeking an injunction to restrain the Central Bank 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.”

Other reliefs sought by Dr Duffuor include a declaration that the “good assets and liabilities of uniBank, including deposits of depositors, cannot be lawfully vested in Consolidated Bank Ghana Limited”.

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