Court of Appeal restores GN Savings and Loans license, overturns High Court ruling

The Court of Appeal has ordered the Bank of Ghana to restore the operating licence of GN Savings and Loans, delivering a major blow to the central bank’s 2018 banking sector cleanup exercise.

A three-member panel overturned an earlier High Court decision that had upheld the licence revocation, directing that all assets of the financial institution be returned to its original owners. The Receiver, Eric Nana Nipah, has also been ordered to hand over management of the company to its previous management team.

Long-Running Legal Battle

GN Savings and Loans was reclassified as a savings and loans company on January 4, 2019, and renamed GN Savings and Loans Company Limited. Seven months later, on August 16, 2019, under former Bank of Ghana Governor Ernest Addison, the central bank revoked the company’s licence and appointed a Receiver.

The owners of GN Savings and Loans, led by businessman Papa Kwesi Nduom, challenged the decision at the High Court in Accra on August 30, 2019, describing the revocation as unlawful, malicious, and unreasonable.

High Court Ruling Overturned

On January 24, 2024, the High Court, presided over by Justice Gifty Addo Adjei, ruled in favour of the Bank of Ghana. The court found that governance deficiencies had rendered GN Savings and Loans incapable of meeting its debt obligations and concluded that the company failed to prove it was solvent at the time its licence was revoked.

Justice Addo Adjei also dismissed claims that the Bank of Ghana acted illegally or unfairly, ruling that the regulator’s intervention was lawful and consistent with Article 130 of the 1992 Constitution.

Despite that ruling, GN maintained that the revocation breached existing laws and appealed the decision, culminating in Tuesday’s judgment by the Court of Appeal.

What Happens Next

The Court of Appeal’s decision compels the Bank of Ghana to immediately restore the institution’s licence and compels the Receiver to return control of the company to its original management. It remains unclear whether the central bank intends to appeal the ruling further.