Breaking! Appeals Court Reveals Why It Ordered BoG to Restore GN Savings & Loans License -FULL STORY

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[00:00:01]Supreme Court, Bank of the Supreme Court. Coincidentally, the court of appeals ruling breaking news.

[00:00:17]The revocation was based on on reasonleness and fairness.

[00:00:32]Bank of Ghana.

[00:00:37]And I told you say we should all listen slowly and look at the ruling because inherent in the reasons the bank of Ghana used on the 16th of August 2019 to revoke GN savings and loans and lines of DJ were some criminal matters and I feel say the unreasonleness and fairness was on a humanitarian grant kind of full ruling 30page ruling and you see The court of appeal makes a very interesting statement. All the 30 page I'll break it all down for you. Very very interesting stuff that I'm reading from the court of appeal. Let's not know that high court one judge court of appeal judges and the ruling was a unanimous decision of GHav.

[00:01:39]What did they say in the ruling in this video?

[00:01:49]You will certainly have a comment. Feel free leave that comment in the comment separate.

[00:02:09]So you can you can tell them last week and breaking news after almost 2019 after almost seven years. Finally, the conclusion of Gian Bank of GH is the court of appeal highs.

[00:03:05]ary 2024.

[00:03:14]But when a court gives a ruling full beach resort and conference center group limited versus the bank of Ghana, the BOG, the AG attorney general and GN savings first.

[00:03:55]So for those who don't know, let me remind you in this case after high court ruling.

[00:04:25]So these were the three grounds mostly ruling you can find you can find a ruling court as a court of appeal from page seven and n the conclusion say the the court place the burden on appalant to prove solveny that is not the correct position say the bank of Ghana made insolveny determination it is an administrative authority acting under statuto power.

[00:04:56]Therefore, it must justify it decision.

[00:04:59]What the burden of proof wrong group.

[00:05:33]Now let's go to the page seven and n and let me read a bit for you. Let me even start from the six. Burden of proof.

[00:05:40]burden of proof or say the trial court placed the burden of proof on appalance to prove their claim by establishing that the third respondent which is GN savings and loans was solvent and by doing so the trial court went on to state as follows. Accordingly, the main issue required to be unraveled by this court is whether or not the third respondent in receiverhip was solvent as at the time it l was revoked.

[00:06:07]The main of the case that was the main issue. Yes. So this is what the court had to say on page 10 or say there is no dispute that the first respondent which is the bank of Ghana in addition of it regulatory functions as regards banks and specialized depositing deposit taking institutions undertake an administrative action and therefore making it an administrative body in that sense being an administrative body in the discharge of his regulatory functions. The first respondent is expected persuant to article 23 of the 1982 constitution to act fairly and reasonably and to comply with the requirements imposed on them by law. See what will amount to fair and and reasonable will depend to a large extent on the circumstances of each case. As Sopa Kufu JSC said in another case, let me not go there or say this in our view in the circumstances of this case will include a decision that is just balanced, rational and justifiable. Thus the question here is is the first respondent the bank of Ghana decision that genian savings and loans is insolvent and consequential revocation of lines is just balanced, rational and justified. The first respondent, the bank of Ghana person one to section 1231 of the banks and specialized depositing taking institutions act 2016 determined that GN savings and loans is insolvent and accordingly revoked it license. Now say the question that arises is what makes a bank or specialized taking deposit institution to be insolvent for a bank to be insolvent. This is the definition for the purposes of this section. Insolveny means the inability of a bank or a specialized taking institution to pay its obligations as they for due and the circumstances where the value of the liabilities of a bank or specialized deposit taking institution exceeds the value of its asset.

[00:08:22]For the above, the regulator being the first respondent bank of Ghana could determine that the bank was specialized taking institution is insent or either or one when it is able to pay it obligations in terms of liabilities when they fall due or where the value of its liabilities exceed the value of its asset. From the above, the test of insolveny, that is to say whether a bank or specialized deposit taking institution is able to pay a debt, is the determination by the regulator. And this can be done either by using the cash flow test or the balance sheet test. The cash flow test entails analyzing the cash flow of the bank or specialized deposit taking institution and evaluating whether the cash flow is adequate to pay it depth. While the balance sheet test entails taking into account the asset of the bank or specialized deposit taking institution, subtracting its liability there from to obtain the net asset and by evaluation determining whether the net asset and are negative or insufficient to cater for its depth that are dealt The high court should have told the Bank of Ghana to do so.

[00:09:48]The balance sheet cash flow.

[00:09:53]So the best way to test or to analyze the soly of any situation is not just the money that is readily available the cash flow. You must also consider the asset of the company. Now when you consider the asset of the company and you put all together with the cash flow there's a negative or there's a positive. There's a positive it means that the bank is solvent. If it's a negative it means that the bank is insolvent. So that is the first issue the high or the appeals court disagreed with the high court judge that is that or say appeals court still on the solveny because that's the main of the issue or say it will appear from the that regulator can elect to test to which test to adopt but it is our view that a regulator that is bent on being It seems the necessarily based on the financials, but it's all based on maybe fairness and reasonableness. But look at the tone of the appeals court in this particular paragraph pay 12 say it will appear from the above that the regulator can elect which test to adopt. But it considers it are considered view sorry that a regulator that is bent on being fair to the circumstances of each case will factor or use both test in determining whether a bank or specialized deposit taking institution is solvent or not.

[00:11:21]After all, the asset of an entity, particularly those that are easily realizable, could easily be realized to pay its debt. And if it turns out that will cover it debt is lack of immediate operating cash could not render it insolvent.

[00:11:42]The facts I don't know if if you get me or fan or AC or bed our wardrobe.

[00:12:27]So if that money can be realized to offset the debt that you owe, you cannot say that person is insolvent. This is the court of appeal speaking.

[00:12:39]After all, okay, in our view, it will not be fair to declare an entity insolvent just because it operating cash flow cannot meet its debt when they fall deep even though it has assets including realizable asset.

[00:12:58]that far exceeds its liability and if allowed to realize those asset could pay its debt and continue to operate as a growing concern. So even though section 1 2 3 4 appears to give the regulator an option as to the two test above the regulator to be fair should apply both tests in determining whether a bank or deposit taking institution is insolvent.

[00:13:25]Bank of it will not be fair to bank. So the first the main government of the issue the court of appeal disagreed with the the high court judge. Now the next issue. The next issue the issue sayions of dollars. But Bank of Ghana, the 16th 2019, Ministry of Finance.

[00:14:40]What did the appeals court say about it?

[00:14:43]Appeals court. Let me let me not even give you the summary. Let me just quickly skip to the that page 15.

[00:14:56]Let me start from technical technical you need to know where you are starting from. Okay. So let me start from here say page 14. As indicated earlier, a fair and just test as to the solveny is one that considers both test as relevant. Or say the appelance contended that the third responder which is GN savings and loans and net particularly Gold Coast and the third applicant have invested in government infrastructure projects such as loans or advances to contractors who the government through its ministries department and agencies MM MDAs have hired to execute projects that several interim payment certifics have been issued by government to ATMDs to to the joint benefit of the terrorist respondent of Gold Coast, the meaning of the IP.

[00:16:07]The appalant relied on exhibit of details of IPC that were due owing and payable to Gian savings alo loans and gold coast in support of their claim. We had a look at the exhibit and on the face of it one cannot tell how it relates to the genian savings and loans.

[00:16:24]There is no indication there on that the third respondent is a beneficial of the IPC's per exhibit.

[00:16:32]Interesting.

[00:16:34]The appant also relied on audit report by Adam and those report had to do with a review and evaluation of government infrastructure development project financed by group.

[00:16:50]It is not disputed that GN savings is a member of group indom but since the audit reports are about the entire group indom and there's no specific indication anywhere therein or daring that all or some of the IPCs are directly to the benefit of GN savings and loans we do not see how that can form basis of saying that the figures there from the part of the assets of Gian bankers debt owed to the government can say audit audit report specific audit report another exhibit which the appalance relied upon to establish the government's debtedness to GN savings alone is exhibit PK3 exhibit PNK3 is an assignment of receivables by Gold Coast Advisor formerly known as Ghana Growth Fund Limited to the to Junior Savings and loans in which the beneficial owner of the sum of 629,091 to almost 630,000 Ghana cities owed to it by the government of Ghana in respect of project financed for government agencies particularly the Ghana cocoa board the road fund uh the road fund get fund the ministry of finance and economic planning and the ministry of finance and economic planning. It assigns same to GN savings and loans or see exhibit PNK3 when viewed alone does not appear to do much in support of the applicant or the appalance claim. But when viewed together with exhibit PNK5 in series of 123, it tells a different story. by exhibit PNK 5 series. Gold Coast advisor wrote to the administrator of G of the Ghana Education Trust Fund for the payment of government project financed by Gold Coast Limited in which a claim was made for the payment of what 10.4 million for completed project for which IPC's were issued and the sum of 659,000 in respect of completed and canceled and ongoing projects. Okay. by exhibit PNK 5 series 2. Gold Coast advisor wrote to the chief executive of the Goko board in which a claim was made for IPCs of 64 million for completed project for which IPCs were issued and 310,000 for completed suspended cancelled and going by PK4. Okay.

[00:19:27]It has to be noted that all these letters were received by the addresses on 2nd of May 2019.

[00:19:36]2nd of May 2019 for August 2019. There is no indication per the evidence on the record that any of the addresses of the exhibit responded to the letters much more they are denying the claims made there in since it is the respondent who are denying the claims by the appalance that the government of Ghana owes it for project it finance. The exhibit PNK5 series 123 were introduced by the appalance. The persuasive burden of proof shifts onto the respondent to rebut the exhibit.

[00:20:12]The same as Bank of Ghana, you being an agency under the finance ministry, if you doubting what indom, I don't know if you get me. That's what the court is saying. Say in this in this instance of the IP that burden of proof must shift to the bank of Ghana. It was say the persuasive burden of proof shift onto the respondent to rebut the claims or say from exhibit PK4123 the total amount owed Gold Coast advisers by government through its agencies is in excess of 2 billion Ghana cities for completed suspended cancelled and ongoing project and we do not view this figure of 620,000 assigned to the third respondent that GSA by Gold Coast Advisor as per exhibit PNK3 to be unreasonable.

[00:21:18]It is for completed project from the set government agencies to which Gold Coast advisor is entitled to payment.

[00:21:38]It's not unreasonable.

[00:21:40]That's what the court is saying. Now the court goes further to SAY THAT THE TRIAL COURT REJECTED what it considered the appalance attempt to solve the insolveny challenge against the third respondent through the alleged liquidity of third appelance and the gold coast advisor limited and the entities are distinct and serve different objectives. The trial court proceeded to state on page blah blah blah indeed a a perusa of the IPC put forth by the applicant showed that they do not represent transactions between GN savings and loans and the government of Ghana and it MDAs but rather related companies significantly the third appalant but related but rather the related companies significantly the third applicant and the government and it mmdas this does goes to affirm the stance of the respondent that in principle the third respondent was insolvent at the time of the revocation of its license or see it is true that the IPCs do not show that there was a transaction between GN savings and loans and the government of Ghana and MMDA. It is also true that Gian saving zones is distinct from the GN the third applicant which is the Gold Coast advisor and their objects are distinct. But if the trial court had averted a mind to the evidence, it would have realized that there is some independence by the bank by the government and it MMB to gold quotes advisor and that by exhibit this gold code advisor had assigned it debt or part of its sum of almost 630,000 to the third respondent and by the assignment the third respondent stepped onto the shoes into the shoes of Gold Coast advisor as is related to a debt owed by the cocoa board.

[00:23:29]If the tri view the companies as a whole coming to the conclusion because the contract is not necessarily between GN savings and loan and the government agencies and MMDs or say the trial court appeared not to place any weight on the IPCs irrespective of whether they related to Gold Coast Advisor Limited or not and the reason for doing so can be found on pages no quoted page now say but as council for the appalance rightly pointed out in the submission the said guide does not require the IPCs to be certified by government auditors to be validated blah blah blah or say another reason the trial court relied on in not attaching weight to the IPCs is simply because they are matters under litigation our view is that the mere fact that a party is in court claiming a debt does not necessarily mean the debt does not exist.

[00:24:26]The requirement per exit blah blah blah is that the work certificate issued should be due for payment within 6 months. So if the IPCs are due for payment within 6 months and the government and and it MDAs fail to pay is the recourse not to go to court to compel them to pay and by doing so can it be said that the debt does not exist or is not due for payment within 6 months? We do not think so.

[00:25:12]the fact you don't think so. So on the two main substantive issue this is it. So again if you listen to the court clearly it come back to the point I think article 23 that they feel that the bank of Ghana was not fair was not reasonable and therefore the trial judge also agreeing with them was not fair and reasonable and they didn't consider lot of other evidences and circumstantial evidences to prove the government of the case which is the insolveny bank of Ghana so disagree the Supreme Court as and when those finalities are brought to the bear I also bring it up. Forgive me.

[00:25:54]I'm sorry for that.

[00:25:59]Whatever you make of it, feel free share it in the comment section. Any feedback, anything, maybe something I didn't say correct, something you have better explanations to because I'm not a finance person. I'm just reading and making sense and explaining what I understand the ruling to be.

[00:26:15]Bye-bye.