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

Dr Duffuor, the 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.

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 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.

“The official administrator appointed for uniBank in March 2018 has found that the bank is beyond rehabilitation. Shareholders, related and connected parties had taken amounts totalling GH¢3.7 billion which were neither granted through the normal credit delivery process nor reported as part of the bank’s loan portfolio.”

“In addition, amounts totalling GH¢1.6 billion had been granted to shareholders, related and connected parties in the form of loans and advances without due process and in breach of relevant provisions of Act 930. Altogether, shareholders, related and connected parties of uniBank had taken out an amount of GH¢5.3 billion from the bank, constituting 75 per cent of its total assets.”



But Dr Duffuor, who is not pleased with the decision of BoG to merge the five local banks into one entity, has sued the Central Bank through his lawyer, Raymond A. Atuguba.

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.

He is also seeking a declaration that the licence purportedly granted to the Consolidated Bank Ghana Limited was not granted in accordance with Act 930 and therefore is “null and void.”

The plaintiff is also praying for an order of mandatory injunction requiring the BoG to restore uniBank to private management and shareholding and any other reliefs, which the court may deem fit or just.



Properties

It emerged that uniBank’s shareholders and related parties allegedly acquired several real estate property in their own names using the funds they took from the bank under questionable circumstances, according to the BoG.

An amount of GH¢5.3 billion of total assets of the bank; out of total customer deposits of GH¢4.3 billion, GH¢2.3 billion was not disclosed to the BoG.

As at March 2018, uniBank had enjoyed a total of GH¢2.2 billion in the form of liquidity support from the Central Bank over two years, but the bank could not turn things around.

It turned out that loans and advances to customers were also overstated by GH¢1.3 billion in prudential returns to the BoG while over 89% of uniBank’s loans and advances book of GH¢3.74 billion as of 31st May 2018 was classified as non-performing.”

Reports said the promises by the shareholders and related parties to refund the monies by mid-July 2018 and legally transfer title to assets acquired back to uniBank were not honoured.

“Based on the Bank of Ghana’s review of KPMG’s assessment of the financial condition of UniBank, the Bank of Ghana has concluded that uniBank is insolvent and has no reasonable prospect of rehabilitation or a reasonably credible path to viability,” the Governor had said.