Businessman sues BoG to stop warnings

Business News of Saturday, 24 November 2018

Source: 3news.com

2018-11-24

The Central Bank, Bank of Ghana

A businessman, Daniel Darko, has filed a suit at the Human Rights Division of the High Court to restrain the Central Bank from making any further pronouncements on shutting down financial institutions in the country.

According to the writ sighted by 3news.com and dated 23 November, 2018, the plaintiff states that the further pronouncements by the Bank of Ghana to close down savings and loans firms is causing “fear and panic” despite not following due process.

He states that the incessant warnings is even affecting his business “thereby affecting his right to life and to participate freely in his chosen economic activity”.

The suit said the Bank’s action has the potential not only to affect businesses but individuals like the applicant who manage firms in the industry.

It explained that the Bank met some savings and loans companies as well as microfinance institutions shortly after it closed down some banks to establish the Consolidated Bank, Ghana.

According to the writ, the meeting followed the Consolidated Bank, Ghana’s inability to pay depositors of the collapsed banks with the pretext that it was only using government bond and was without liquid.

The depositors are mostly savings and loans operators.

It said while discussions were ongoing, the Central Bank announced – through the media – that “it is about to close down most Savings and Loans in the country without further explanation”.

It said that pronouncement led to bulk withdrawals by customers, a situation “not only adversely affecting operations of the Savings and Loans in the financial sector over which the Respondent superintends but also the Applicant as well”.

It said the Central Bank failed to follow laid-down procedures in coming out in the first place.

“That the nature of the pronouncement made by the Respondent has direct prejudicial impact on the operations of the Savings and Loans as well as the Applicant herein and same ought to be done in line with due process.”

The Chief Executive Officer of Ghatalia Limited, therefore, wants the Court to restrain the Bank from “making such further pronouncements on the activities on the savings and loans companies until it has completed resourcing the Consolidated Bank in order to meet demands of depositors/customers of the defunct banks”.

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