The lawyer representing businessman Dr Papa Kwesi Ndoum has declared that GN Savings and Loans was never insolvent when the Bank of Ghana (BoG) revoked its licence during the country’s banking sector cleanup, and that the central bank failed to follow the correct legal process before shutting the institution down.
Speaking on JoyNews after Thursday’s Court of Appeal ruling that overturned the earlier High Court decision and ordered the full restoration of the company’s licence, Cletus Alengah argued that the BoG excluded significant government backed investment instruments belonging to GN Savings and Loans from its assessment before reaching its insolvency determination.
“The institution was not insolvent,” he stated firmly.
Alengah explained that insolvency under Ghanaian law requires either that a company cannot meet its liabilities when they fall due or that those liabilities exceed its assets. He maintained that neither condition existed at the time the licence was revoked.
The lawyer revealed that GN Savings and Loans formally disputed the central bank’s figures and requested a reconciliation of accounts involving amounts running into hundreds of millions of cedis. The BoG, he said, never responded to that request and proceeded to revoke the licence less than a week later.
Alengah went further, arguing that many of the violations the BoG cited as grounds for revocation, including concerns around capital adequacy ratios, related party transactions and the publication of financial accounts, carried specific remedies under existing law, among them administrative fines, and that none of those remedies justified closing a financial institution entirely. He said the correct legal question the regulator should have asked was whether GN Savings and Loans met the insolvency threshold under Section 123 of the relevant statute, and that all other regulatory concerns became secondary once that bar was not crossed.
The Court of Appeal’s unanimous ruling directed that the company’s licence be restored, that all assets be returned to their original owners and that the Receiver transfer management back to the former leadership.
Alengah said his legal team was not surprised by the unanimity of the decision, explaining that they always believed the evidence strongly supported their case. He said the appellate court agreed that important facts had not been properly weighed during the revocation process and that a different conclusion would have been inevitable had all assets been fully considered.
On what comes next, the lawyer acknowledged that recovering assets after seven years under receivership will be a detailed process. The court recognised that some assets may already have changed hands and ruled that third parties who acquired them in good faith could retain those holdings. Alengah stressed, however, that every transaction would need to be examined on a case by case basis.
He added that the Receiver must now provide a full accounting of all proceeds generated from the sale of company assets during the receivership period, and that those proceeds must form part of GN Savings and Loans’ restored estate.
