A high court in Accra has granted an application brought by lawyers for Dr Kwabena Duffour and two others, to have a suit filed in the name of Unibank dismissed on grounds of illegality of Unibank’s Receiver’s appointment thereby stripping Nii Amanor Dodoo of capacity to institute and maintain action against Dr Duffuor and other Defendants.
Mr Nii Amanor Dodoo who prior to his appointment as the receiver of the bank served as senior partner with KPMG from 2013-19 was involved in the Official Administration of the bank on behalf of KPMG on the appointment of Bank of Ghana. The lawyers for the Defendants argued that section 122(8) of the banks and Specialised Deposit Taking Institutions Act 2016 (Act930) prohibits a person who has acted as an Official Administrator of a bank, from taking a senior position in the same bank for a period of 2 years after the end of the period of Official Administration, and that Nii AManor Dodoo’s almost instantaneous appointment as receiver after the end of the period of Officvial Adminjstration by essentially the same person was in breach of the law.
The pertinent application is in a queue of several suits in multiple courts since 2018 when some five banks came under what some describe as political witch-hunting of the banking sector. The government’s spokespersons maintained that its action is legal and a reasonable cleanup of the banking industry.
Delivering her Ruling on the matter, the Presiding Judge her Ladyship Justice Afi Agbanu Kudomor, justice of the High Court of Ghana (commercial division), found the appointment of KPMG’s Nii Amanor Dodoo to be illegal and invalid, the court held that, the bank of Ghana acted contrary to section 122 (8) of The Banks and Specialised Deposit taking Institutions Act 2016 (Act 930).
The plaintiff pleaded with the court to dismiss the said application, suggesting the application was an abuse of the court process, and in any event KPMG’s obligations were not Mr Dodoo’s Obligations, but the court disagreed and ruled that, the plaintiffs cannot attempt to divorce the receiver from his responsibilities as stated by law. The Legal position on partnerships like KPMG was that its actions were the individual actions of the partners and vice versa the Court relied on the Incorporated Partnerships Act 1962 (Act152) in establishing the duties of NiiAmanorDodoo a former Senior Partner of KPMG with regards to the appointment. The Court further stated that the obligation of NiiAmanorDodoo or any partner of KPMG to deny the appointment of Receiver of Unibank until 2 years after their role as Official Administrator of Unibank would follow them into retirement just as it had followed Mr. Dodoo into retirement.
The court in its deliberative analysis held that the central bank acted in manner that abuses the position of the act. It stated that, the text of section 122 (8) of act 930 “indicates disjunctive and not conjunctive restrictions”. According the learned judge, “an appointment that violates the provision of a statute is void and of no effect. The Court described the appointment as having come out of nothing as follows: “…Out of Nothing Comes Nothing..”
One will recall that, sometime in March 2018 the bank of Ghana appointed KPMG as the official administrators for Unibank, mandated to ascertain the financial standing of the bank, this subsequently led to the revocation of the license of Unibank and four other banks. Unibank’sshaeholders has since challenged the decision of the central bank, calling it unlawful, and is challenging the revocation before an arbitration panel in Accra
It will be noted that, the central bank in statement dated August 1st 2018 announced a receiver for these banks a decision it said at the time was legal and in line with law, but the judge hearing the application indicated that the said action of the central bank is unlawful due to the failure on it part to observe the two years duration required in law to appoint anyone who acted in the past in any official capacity relating to bank. The judge effectively dismissed all other application pending before her in the case.
This judgement will be one of the most critical hard blows delivered to the Bank Of Ghana and may be a harbinger of many more to come The central bank is in court fighting many other such cases against owners of the other banks and financial institutions affected by the mass revocation of licenses in 2018.
