BoG did no wrong in revoking licence of Unicredit — Supreme Court overturns decision of Court of Appeal
The Supreme Court, in a unanimous decision, has affirmed that the Bank of Ghana did not commit any error in revoking the licence of Unicredit Ghana.
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The ruling affirms the decision of the High Court which ruled in March 2021 that the central bank did nothing wrong and reverses the decision of the Court of Appeal, which ruled in July 2022 that the BoG did not follow due processes in revoking the licence.
The Panel of Supreme Court justices who gave the ruling were the Chief Justice, Gertrude Araba Esaaba Sackey Torkornoo; Justice Mariama Owusu, Justice Prof. Henrietta Joy Abena Nyarko Mensa-Bonsu, Justice Ernest Yao Gaewu and Justice Yaw Darko Asare.
Background
In August 2019, the BoG declared UniCredit Ghana Limited (Unicredit) insolvent and revoked its licence to operate as a savings and loans company, under Section 123 of the Banks and Specialised Deposit-Taking Institutions Act of 2016 (Act 930).
Hoda Holdings Ltd, the majority shareholder of UniCredit, filed an application at the Human Rights Division of the High Court seeking a judicial review of the decision of the BoG to revoke UniCredit’s licence and an order of injunction restraining the bank from interfering with the operations of UniCredit.
In March 2021, the High Court, presided over by Justice Gifty Agyei Addo, ruled in favour of the Bank of Ghana, and held that from the evidence before the Court, UniCredit was insolvent prior to the revocation of its licence.
The court found that contrary to UniCredit’s claim of not being given a hearing, the Bank of Ghana served UniCredit with numerous notices, directing it to rectify its capital deficiency.
The court further held that the Bank of Ghana committed no missteps in revoking the licence of Unicredit.
The High Court, thus, affirmed that the steps taken by the Bank of Ghana to revoke the licence of UniCredit and place it under receivership were in accordance with Act 930.
Dissatisfied with the decision of the High Court, Hoda Holdings Ltd appealed to the Court of Appeal and in July 2022, the Court of Appeal, comprising Justice Janapare A. Bartels-Kodwo, Justice Merley Wood and Justice G.S. Suurbaareh, overturned the decision of the High Court and ruled in favour of Hoda Holdings Ltd.
The Court of Appeal held that the Bank of Ghana in revoking the licence of UniCredit under Section 123 of Act 930 should have followed the steps provided in Section 16(3&4) of Act 930.
The Court of Appeal further held that the failure of the Bank of Ghana to comply with the procedure in Section 16(3&4) of Act 930 meant that UniCredit was not given a hearing before its licence was revoked.
Dissatisfied with the decision of the Court of Appeal, the Bank of Ghana filed an appeal at the Supreme Court against the decision of the Court of Appeal.