Business News Fri, 3 Aug 2018

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Belstar, Starmount sue Bank of Ghana

Shareholders of embattled uniBank have sued the Bank of Ghana for cutting short its moves to acquire shares of adb.

According to the plaintiff, the decision taken by the Bank of Ghana was “arbitrary, capricious and inconsistent”.

The shareholders are Belstar Capital Limited and Starmount Development Company Limited.

The suit follows assertions made by the governor of the Bank of Ghana, Dr. Ernest Addison that Belstar’s 24 percent shares and Starmount’s 11 percent shares in adb were acquired using funds from the Bank of Ghana.

Dr. Addison earlier stated that the funds were given to uniBank to help it solve its liquidity challenges.

Announcing the financial health of uniBank after consolidating it with other banks on [August 1, 2018], Dr. Addison said the official administrator, KPMG’s reports confirmed, based on a detailed review and validation of the financial condition of uniBank that the bank was balance sheet insolvent.

“Among other things, the bank’s interest income and other sources of income are insufficient to cover the associated cost of funds of underlying borrowings and liabilities, as well as overheads of about GH¢0.31 billion per annum.

“A significant portion of the bank’s loan book which forms the largest component of the bank’s assets, is non-performing. The earning capacity of the bank continues to deteriorate” he added.

He observed that key findings from KPMG’s reports indicated serious corporate governance, risk management, compliance and management flaws, as well as unlawful transactions involving shareholders, related parties, and connected parties.

Source: citibusinessnews.com

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