The Court of Appeal has overturned the revocation of the operating licence of GN Savings and Loans Company Limited, delivering a significant judgment in one of Ghana’s most closely watched banking sector cases.
In a unanimous decision delivered by a three-member panel, the appellate court quashed an earlier High Court ruling that had upheld the decision of the Bank of Ghana to revoke the company’s licence during the banking sector clean-up exercise.
The Court of Appeal held that the revocation was “unfair and unreasonable,” effectively setting aside both the Bank of Ghana’s administrative action and the High Court judgment that affirmed it.
As part of the ruling, the court directed the receiver to immediately hand over possession, management, and control of the company’s assets and operations back to its shareholders.
Background to the Dispute
GN Bank Limited was reclassified as a savings and loans institution on 4 January 2019 and subsequently became known as GN Savings and Loans Company Limited.
However, on 16 August 2019, the Bank of Ghana, under the leadership of Dr Ernest Addison, revoked the institution’s operating licence as part of the government’s banking sector reforms.
Following the revocation, Eric Nana Nipah was appointed as receiver to oversee the institution’s affairs.
The decision was challenged in court by Groupe Nduom, led by Dr Papa Kwesi Nduom, who argued that the revocation was unlawful and unjustified.
On 24 January 2024, the High Court in Accra, presided over by Justice Addo, ruled in favour of the Bank of Ghana and upheld the revocation.
Dissatisfied with the judgment, the company’s owners proceeded to the Court of Appeal.
Major Legal and Economic Implications
The latest ruling is expected to reignite debate over Ghana’s banking sector clean-up exercise, which led to the collapse or restructuring of several financial institutions between 2017 and 2019.
Legal analysts say the decision could set an important precedent regarding administrative fairness, regulatory accountability, and the limits of discretionary powers exercised by financial regulators.
The judgment may also influence ongoing and future litigation connected to the financial sector reforms.
For shareholders and customers of GN Savings and Loans, the ruling represents a major legal victory and potentially opens discussions on operational restoration and financial recovery.
Reporting by BrakoPowers.com
Be First to Comment