Convener of collapsed First Ghana Savings and Loans gives Bank of Ghana ultimatum to reinstate its licence, here’s why

Staff of the collapsed First Ghana Savings and Loans Limited has given Bank of Ghana up to September 11 to rescind its decision on the company.
The ultimatum, the company says is because the government is the reason for its woes.
The staff has hence called on the president to urgently intervene to have the revocation of their licence reversed.

The staff says the central bank has up to September 11, this year to rescind its decision or the defunct company may take further action against the BoG.

The convener of the Professional and Managerial Union of First Ghana Savings and Loans, Robert Agbodza made the revelation while addressing the media on the reasons for the revocation of the company’s licence.

He blamed government through the majority shareholder National Investment Bank (NIB), for its woes.

“Our information was that a minimum additional capital of GH¢20 million would have averted this action. However, the government, through NIB, has watched on for the BOG to revoke our licence. It is therefore preposterous for the majority shareholder (the state) of 98% who failed to discharge their responsibility of recapitalizing FGSL to turn around, using another agency of the state to accuse FGSL of insolvency and revoke its licence,” the convener said.

On the matter of the negative net worth and capital adequacy ratio, the Mr Agboza noted that the Bank of Ghana’s report failed to mention that the negative net worth and the negative Capital Adequacy Ratio (CAR) were arrived at, after First Ghana Savings and Loans Ltd had impaired a total investment of GH¢17.5 million (GH¢19.8 million in June 2019) in uniSecurities Ghana Ltd, Gold Coast Fund Management Ltd and FirstBanC.

As at June 2019, the prior impairment net worth of FGSL was GH¢5 million, whilst the CAR stood at 15.2% (all positive according to the workers).

About First Ghana Savings and Loans Limited

First Ghana Savings and Loans Limited which started as First Ghana Building Society (FGBS) in 1956 was originally licensed to operate as a mortgage financing institution.

From March 8, 2015, to 16th August 2019, the company served as the only savings and loans company in Ghana with over 50% of its customers being pensioners on the payrolls of SSNIT and the Controller and Accountant General's Department.

Among the reasons the Bank of Ghana gave for revoking the licence of the institution, were the fact that they had a negative net worth of GH¢14.08 Million and a capital adequacy ratio of negative 54.47% as at May 2019.

Mr Agbodza’s appeal

Mr Agbodza further went on to call on the president to as a matter of urgency intervene to have the revocation of their licence reversed.

“We are appealing to the Bank of Ghana to rescind its decision as early as practicable. There are other banks and savings and loans companies whose positions are worse than FGSL, yet their licences have not been revoked,” he said.

Adding that, “We appeal to the President to, as a matter of urgency, intervene in our case. The government would not be fair to us if it allows the BOG’s decision to stand. Finally, we demand that NIB takes its handoff First Ghana Savings and Loans to allow interested investors to take over the company.”