The Supreme Court of Ghana has unanimously affirmed that the Bank of Ghana (BoG) committed no error in revoking the licence of UniCredit Ghana Limited.

The five-member panel, presided over by Justice Gertrude Sackey Torkornoo, reversed the Court of Appeal’s decision and upheld the High Court’s ruling in the case of the Republic versus Bank of Ghana, Ex Parte Hoda Holdings Limited.

On August 16, 2019, the Bank of Ghana declared UniCredit Ghana Limited 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). This decision was based on UniCredit’s failure to rectify its capital deficiencies despite numerous notices and directives from the Bank of Ghana.

Consequently, Hoda Holdings Limited, the majority shareholder of UniCredit, sought judicial review of the Bank of Ghana’s decision at the Human Rights Division of the High Court. They also requested an injunction to prevent the Bank from interfering with UniCredit’s operations.

On March 18, 2021, the High Court, presided over by Justice Gifty Agyei Addo, ruled in favor of the Bank of Ghana. The Court held that evidence presented showed UniCredit was insolvent before its licence was revoked. Furthermore, the Court found that contrary to UniCredit’s claims, the Bank of Ghana had issued numerous notices directing UniCredit to rectify its capital deficiencies.

The Bank had warned that failure to comply would lead to the revocation of its licence under section 123 of Act 930. The High Court concluded that the Bank of Ghana followed due process in revoking UniCredit’s licence and placing it under receivership in accordance with Act 930.

Appeal Court’s Decision

Dissatisfied with the High Court’s ruling, Hoda Holdings Limited appealed to the Court of Appeal. On July 7, 2022, the Court of Appeal, comprising Justice Janapare A. B, Justice G.S., Justice Merley Wood, and Justice Gbiel S. Suurbaareh, overturned the High Court’s decision.

The Court of Appeal ruled that the Bank of Ghana, in revoking UniCredit’s licence under section 123 of Act 930, should have adhered to the procedures outlined in section 16(3&4) of Act 930. The Court held that the Bank’s failure to follow these steps meant that UniCredit was not given a proper hearing before its licence was revoked.

Supreme Court’s Final Verdict

The Bank of Ghana, dissatisfied with the Court of Appeal’s decision, filed an appeal at the Supreme Court. In a unanimous decision, the Supreme Court reversed the Court of Appeal’s ruling and affirmed the High Court’s judgment.

The Supreme Court found that the Bank of Ghana committed no missteps in the revocation process. The steps taken by the Bank to revoke UniCredit’s licence and place it under receivership were in full compliance with Act 930.

The Supreme Court’s decision underscores the importance of regulatory compliance and due process in the banking sector. It reaffirms the Bank of Ghana’s authority to take necessary actions to maintain financial stability and protect depositors’ interests. The ruling also highlights the judiciary’s role in resolving disputes between regulatory bodies and financial institutions, ensuring that the law is upheld and due process is followed.

This verdict serves as a significant precedent for future cases involving the revocation of licences by regulatory authorities. It also provides clarity on the procedures that must be followed by both financial institutions and regulatory bodies, ensuring that actions taken are both fair and lawful.

The Supreme Court’s affirmation of the Bank of Ghana’s decision to revoke UniCredit’s licence marks the culmination of a legal battle that underscores the critical role of regulatory oversight in the financial sector. The decision not only supports the Bank of Ghana’s actions but also reinforces the importance of adhering to legal and procedural guidelines in the regulation of financial institutions.