The High Court (Human Rights Division) has quashed the Bank of Ghana’s (BoG) revocation of the operating licence of Ideal Finance Limited.
The ruling, which was delivered on Monday, March 10, marks a major victory for the defunct financial institution in its legal battle against the central bank.
The court ruled that the Bank of Ghana failed to exhaust the proper procedures required for the revocation of Ideal Finance’s licence.
The BoG had revoked Ideal Finance’s licence as part of its financial sector cleanup exercise, citing insolvency and poor governance structures. However, the court ruled that the revocation was unjustified, effectively restoring the company’s legal standing.
Background
On August 16, 2019, the Bank of Ghana revoked the licenses of 23 insolvent savings and loans and finance house companies, including Ideal Finance, GN Savings and Loans, First Allied Savings and Loans, Midland Savings and Loans, and Unicredit Savings and Loans.
The Central bank justified its action by stating that these institutions remained insolvent despite being given ample time to recapitalize.
BoG’s financial sector cleanup was aimed at restoring confidence and stability within the banking system, but it also led to the collapse of numerous institutions, leaving depositors and stakeholders in financial distress.
