The Bank of Ghana (BoG) in its written address dated 8th of May 2020 and Affidavit sworn on 6th May 2020 to the Human Rights Court failed to justify why it used the insufficiency of an alleged GHC30.33 million debt owed by the Government of Ghana to revoke the license of GN Savings.
The BoG obviously could not take advantage of extended adjournments of the case filed by Dr Papa Kwesi Nduom and others in the Human Rights Court Accra granted to them by the presiding judge, Justice Gifty Agyei-Addo.
On 30th August 2019, Dr Nduom and others filed a motion at the High Court (Human Rights Division) to reverse the revocation of the license of GN Savings claiming that the BoG did not take into account the full value of money owed and due to the company by the Government of Ghana and its agencies.
Dr Nduom and his company have claimed that if even a fraction of what is owed had been paid, GN Savings would have been a very liquid financial enterprise.
It would be recalled that Groupe Nduom has consistently claimed that the Government of Ghana and its agencies owe the company over GHC2.2 billion out of which it assigned over GHC900 million to GN Savings. The GHC2.2 billion was arrived at through an independent audit carried out by a reputable accounting and auditing company.
This independent audit was carried out on the advice of the Ministry of Finance and at various points involved discussions between the auditor and officials of the Ministry of Finance.
It has been the contention that had all the amounts due to GN Savings been taken into proper account, the company would have exceeded the capital requirements of the BoG not as a savings and loans company, but as a universal bank.
Surprisingly, the Address and Affidavit of the BoG did not attack the GHC2.2 billion claimed by the Groupe Nduom. Even more so, it betrayed the Ministry of Finance by failing to provide any justification for the GHC 30.33 million contained in a letter from the Ministry of Finance it relied upon to revoke the license.
The Central Bank rather made the argument that it was not required to verify the amount in the Ministry of Finance letter. This is an amazing admission from a Central Bank supposedly independent that it used a common letter from a ministry of state to revoke a savings and loans license it had independently granted only a few months earlier in January 2019.
Interestingly enough, the BoG variously referred to much higher figures in its submissions to the Court. At some point it made reference to GHC102.73 million owed to Groupe Nduom of GHC644 million plus another GHC900 in uncompleted projects.
In this confusion of different accounts receivables, there appears to be a vindication of the claim made by Dr Nduom and others that the revocation of the GN Savings license was malicious; that the BoG did not do its homework to ascertain the veracity of the GHC30.33 million contained in the Ministry of Finance letter; that the debts of government and its agencies cannot be disregarded and are as good as cash; and that the decision to revoke the license cannot be justified.
To many in the financial sector that have read the submissions of Dr Nduom and others and the BoG, this case is a clear cut one – the GN Savings license should be restored and an order made by the Court for an independent confirmation of the debt owed by the Government of Ghana and its agencies to the Groupe Nduom companies.