A High Court in Accra has overturned the Bank of Ghana’s (BoG) 2019 decision to revoke the operating licence of CDH Savings and Loans Company Limited, ordering both parties to resolve the issue through arbitration.
Justice Brew’s ruling, issued on November 1, 2024, criticized the BoG’s approach, underlining the constitutional requirement for fair and reasonable administrative actions.
The Court noted that the BoG’s two-week deadline for CDH to liquidate assets to address its liquidity challenges was “unreasonable and unfair.”
BoG had originally revoked CDH’s licence on August 16, 2019, citing liquidity issues stemming from CDH’s failure to sell repossessed collateral.
This, the central bank argued, led to an inability to meet withdrawal demands from depositors.
In response, CDH’s shareholders, CDH Financial Holdings Limited, challenged the decision in court, seeking to have it quashed on grounds of procedural unfairness and to prevent any further disruption to its operations until arbitration.
In his ruling, Justice Brew referenced Article 23 of Ghana’s 1992 Constitution, underscoring that administrative actions must uphold fairness.
By overturning the BoG’s licence revocation, the ruling reinforces legal protections for businesses facing regulatory actions and emphasizes the importance of due process in Ghana’s financial sector.
The case now heads to arbitration, where CDH and the BoG are expected to negotiate a resolution.
source: citinewsroom
