… calls BOG’s statements “wildly inaccurate”
Groupe Nduom (GN) has contested the Bank of Ghana’s (BoG) decision to place GN Savings under receivership, insisting that the central bank’s statements regarding GN Savings’ financial health are “wildly inaccurate” and is calling for the immediate restoration and upgrade of its license.
In a press release issued on June 16, 2024, the group insists that BoG’s claim of insolvency on the part of GN Savings, a subsidiary of Groupe Nduom, is fundamentally flawed.
The central bank based its decision on the assertion that GN Savings had less than GH¢30.33 million available, a figure GN vehemently disputes. According to GN, the Ministry of Finance had confirmed that the balances due to GN Savings and other related parties far exceed this amount.
“Our position is that GN Savings is not only solvent but would be highly liquid if the MoF simply ordered itself and other government agencies to quickly pay amounts owed to GN Savings and other related entities,” the press release stated.
Much of GN’s argument centres around substantial debts owed to Groupe Nduom companies by the Government of Ghana (GoG) and its agencies, totalling over GH¢7.1 billion. This amount, GN claims, would ensure the liquidity necessary for GN Savings to pay its customers and operate as a universal bank.
“We question why BoG, knowing fully well what the real fundamental issue was… would take the action that it did in the manner that it was done,” GN pointedly remarked. The press release detailed how unpaid debts by entities such as COCOBOD, GETFund, and the Ministry of Finance have hampered GN Savings’ financial position.
Legal and operational compliance
GN Savings claimed that it has complied with all regulatory requirements laid out by BoG. The company said that in June 2019, it submitted a comprehensive report detailing its compliance and positive business trajectory. This report, GN claims, was neither reviewed nor discussed by BoG before the decision to revoke the license was made.
“In furtherance to meeting the conditions stipulated in the Bank of Ghana letter announcing the reclassification of GN Bank to a Savings and Loans Company, the following documentation and processes have been executed and submitted in fulfilment of BOG guidelines,” the press release elaborated, listing various compliance measures, including rebranding and branch rationalisation.
Distinction Between GN Bank and GN Savings
GN also clarified the distinction between GN Bank and GN Savings, refuting allegations of misconduct related to foreign currency transfers. It explained that transactions involving International Business Solutions (IBS), a company established by Dr. Nduom in the 1980s, were legitimate and properly documented.
“The idea that over US$60 million in foreign currency transactions can occur over a 10-year period with ‘no documentation’ as implied by Bank of Ghana in that release is extremely far-fetched,” GN stated, adding that any issues pertaining to GN Bank as an entity should not impact GN Savings.
“Why would a state institution, knowing fully well the debts owed by other state institutions… abruptly, without notice, revoke the license to operate as a savings and loans company?” it questioned.
In a bid to rectify what it describes as a grave injustice, GN said it has sought the intervention of high-ranking officials, including President Nana Addo Dankwa Akufo-Addo and Vice President Mahamudu Bawumia, and has taken legal action to restore its license.
The company also called for BoG to “correct its mistake,” stressing the broader implications for financial inclusion and the unwarranted closure of 305 branches across the country.
