CDH & Bank Of Ghana Meet In Court

The new commercial court in Accra will hear a case between CDH Financial Services and the Bank of Ghana today.

CDH is seeking a court order to reverse the central bank?s decision to revoke the license of CDH Discount House.

The bank of Ghana argues the company?s re-capitalization plan hinges on assumed inflows. It argues the company failed to submit a comprehensive business plan aimed at resuscitating the company.

But the Executive Director of CDH Financial Holdings, Adu Sarkodie, says the central bank?s action is untenable.

?What has caused the problem is mainly the indebtedness of state-owned enterprises such as Ghana Airways. It has a debt of over ?112 billion, GNP of over ?13 billion, and GNPC just paid half of what is due to us. We thought that with these debts, especially to Ghana Airways, why aren?t they taken into consideration when dealing with CDH?s solvency?? says Mr. Sarkodie.

He says the only document the group had was a summary, which asked that it answer questions on solvency, liquidity and management. He says it didn?t ask about business plans and how to leverage the company?s name to make money.

The commercial court will determine the merits of both arguments. However, the Bank of Ghana is yet to file its defence. It?s likely the court will grant it time to do that.

Meanwhile, the CDH board is giving up on its Assets Management Subsidiary in order to have the license of CDH Securities restored.

That will leave the CDH group with two subsidiaries: CDH Insurance and Securities Ltd.