High Court overturns BoG decision to revoke CDH Savings and Loans Company licence
The High Court in Accra, on Friday overturned the decision of the Bank of Ghana (BoG) in 2019 to revoke the operating licence of CDH Savings and Loans Company Limited.
Consequently, the court presided over by Justice Emmanuel Bart-Plange Brew, had ordered CDH Savings and Loans Company and the BoG to resolve the issue through arbitration.
The judge said he was of the considered opinion that Bank was unfair in exercising its administrative action against CDH who is the plaintiff in the matter before the high court.
The Court noted that the BoG’s two-week ultimatum for CDH to liquidate assets to address its liquidity challenges was “unreasonable and unfair.”
BoG revoked CDH’s licence on August 16, 2019, over liquidity challenges stemming from CDH’s failure to sell repossessed collateral.
It was the case of the BoG that the challenges made it difficult for CDH to meet withdrawal demands from depositors.
Displeased with the action of the BoG, CDH’s shareholders, CDH Financial Holdings Limited, went to court to have it quash BoG’s decision on grounds of procedural unfairness and to prevent any further disruption to its operations until arbitration.
The ruling of the high court reinforces legal protections for businesses facing regulatory actions and emphasises the importance of due process in Ghana’s financial sector.
Furthermore, the BoG per a notice dated August 16, 2019, revoked the license of CDH Savings and Loans Company Limited to operate as a specialised deposit-taking institution.
The BoG said its decision was based on a number of reasons including the failure of CDH to sell repossessed collaterals caused liquidity challenges resulting in the company’s inability to meet withdrawal requests from numerous depositors.
However, CDH shareholders (CDH Financial Holdings Limited) in August 2019 initiated an action against the BoG in case No. (THE REPUBLIC vs. BANK OF GHANA (Suit No. HR/088/2019).
The plaintiff asked the court for an order of Certiorari directed at the BoG to bring up to the court for the purpose of being quashed, the notice dated August 16, 2019 declaring CDH Savings and Loans Company Limited insolvent and revoking its license to operate as a Specialised Depot-Taking Institution.
They wanted the court to make an order of interlocutory injunction restraining the respondent, their agents, assigns, privies, hirelings or otherwise how so ever from interrupting with the operations of the CDH Savings Loans Company Limited and to refer the subject-matter of this instant action to Arbitration.
The CDH again asked the court for any order(s) as the court may deem fit upon the grounds set out in its accompanying affidavit and other processes which were dully filed.
BY MALIK SULLEMANA
