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Bank collapse: Adongo drags govt to court over GH¢2 billion Ghana Amalgamated Trust

Isaac Adongo, Member of Parliament for Bolgatanga Central has sued the government over the GH¢2 billion Ghana Amalgamated Trust (GAT) meant to help some five struggling local banks.

Isaac Adongo

The Attorney General, the Ghana Amalgamated Trust Limited and the National Trust Holding Company Limited as first, second and third defendants are part of the lawsuit.

The MP who doubles as the Member of the Finance Committee of Parliaments is praying the court for the following reliefs:

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  1. A declaration that the agreements and arrangements between the 2nd Defendant and each of the selected local banks whereby the 2nd Defendant purports to use borrowed funds to purchase the shares of each of the selected banks is illegal as it contravenes section 9(d) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930)
  2. A declaration that the purported approval of the request of the Minister of Finance for the issuance of GHS2 billion sovereign guarantee to support the borrowing of funds in the debt market by the 2nd Defendant to enable the 2nd Defendant purchase shares in the selected local banks does not serve to cure the breach of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which is the governing statute of the banking sector.
  3. A perpetual injunction against the Defendants jointly and severally, from proceeding in any manner, whatsoever, to execute or put into effect the investment agreements between the 2nd Defendant and each and all of the selected local banks
  4. Costs including legal fees.

In January 2019, the government announced a special programme to rescue five indigenous commercial banks that failed to reach the BoG's minimum capital requirement of GH¢400 million.

The Finance Ministry said a new entity known as the Ghana Amalgamated Trust will support solvent and well-run indigenous banks, which were otherwise having difficulties meeting the new minimum capital requirement deadline, to meet their obligations.

The beneficiaries of the GAT programme are Agricultural Development Bank (ADB), National Investment Bank (NIB), OmniBank Ghana Limited/Bank Sahel Sahara Ghana (OmniBank/BSIC), Universal Merchant Bank (UMB) and Prudential Bank.

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