Member of Parliament sues the government over GHC2 billion GAT

Member of Parliament for Bolgatanga, Isaac Adongo has sued the government of Ghana over the GHS2 billion Ghana Amalgamated Trust (GAT) meant to help some five struggling local banks.

The Bolgatanga MP sued the Attorney General, the Ghana Amalgamated Trust Limited and the National Trust Holding Company Limited as first, second and third defendants respectively.

He is praying the court for the following reliefs:

1. A declaration that the agreements and arrangements between the 2nd Defendant and each of the selected local banks whereby GAT 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 GAT to enable the GAT 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 GAT and each and all of the selected local banks

4. Costs including legal fees

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Meanwhile, the Ghana Amalgamated Trust (GAT), the special purpose vehicle tasked with raising financing to support some five (5) banks in recapitalising is turning to the public to raise bonds for the said banks.

The GAT first came to light when the Bank of Ghana (BOG) governor, Dr. Ernest Addison, announced the statuses of the banks at the beginning of the year.  He hinted of the possibility of the use of private pension funds to shore up some 5 banks that were term ‘well-run and solvent’. 

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The banks in question are National Investment Bank (NIB), Agricultural Development Bank (ADB), OmniBSIC Bank, UMB Bank and Prudential Bank.  The news of a possible use of pension funds did not hit the right nerves of stakeholders within the pensions industry. The idea was met with stiff opposition from the TUC who expressed dismay as communication broke without any prior knowledge and recourse to them.