Complicit directors, owners of defunct S&Ls will face the law— BoG

The Bank of Ghana has responded to concerns calling for the heads of those found complicit in the collapse of 23 Savings and Loans and Finance House companies, saying they will not be treated with kid-gloves.

In a press statement released to answer some frequently asked questions regarding revocation of the 23 financial institutions’ licences, the BoG said among the actions to be taken against the owners and directors is to declare them unfit and proper – and push for prosecutions if need be.

What this means is any director or owner of the failed financial institutions found guilty of wrongdoing that led to the companies’ rundown will not be allowed to come close to managing any financial institution in the future.

“Any persons found to have contributed to the failure of these institutions will be declared not fit and proper to engage in business regulated by the Bank, and reported to the law enforcement agencies for criminal action; and further action including possible prosecution where applicable.

“In addition, the Receiver will institute civil actions against relevant persons to claim damages and restitution where applicable,” the statement said.

Despite this assurance from the BoG, there are still concerns and misgivings over whether it can really bite hard – as the same comments were made about the directors and owners of the seven defunct banks whose action or inactions have cost the taxpayer some GH¢12billion after they were merged into the Consolidated Bank Ghana.

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Again, the central bank made similar comments after it revoked the licences of over 340 microfinance companies a few months ago; however, no serious action has been seen yet.

Another concern raised by many customers of the collapsed institutions border on frustrations they go through in an attempt to retrieve their locked up monies. The BoG has however assured all customers of their deposits’ safety, as government has made funds available to take care of them.

“Government has made available funds that enable the Receiver to pay depositors of the savings and loans companies and finance houses after validation of their claims. Other creditors of the failed institutions will be settled by the Receiver in line with the hierarchy or priority of creditors’ claims set out under Act 930,” the statement said.

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