An Accra High Court has quashed the revocation of the operating license of TI Microfinance by the Bank of Ghana following a judicial review application brought before the court by the founder and majority shareholder of the company, Emmanuel Babuboa.

In the evaluation of the evidence, the court found at page 60 of the judgement that the decision by the central bank in revoking TI Microfinance’s license on May 31, 2019, was illegal, unreasonable, unfair and above all not in conformity to the tenets of administrative justice guaranteed under Article 23 and 296 of the 1992 Constitution” of the Republic of Ghana.

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Based on the application, the court made the following orders:

1. An order of certiorari quashing the decision of the Bank of Ghana in revoking TI Microfinance’s license.

2. A declaration that the revocation of TI Microfinance’s license by the Bank of Ghana is null and void.

3. An order directed at the Bank of Ghana to restore the licence of TI Microfinance.

4. An order of prohibition directed at Bank of Ghana and all its officers, workmen, assigns or privies, from interfering with the lawful activities of TI Microfinance.

5. Cost of GH¢30,000.00 awarded against the Bank, and in favour of the Applicant.

On the particular evidence on which the court relied to make its decision, the court found at pages 52 and 53 of the judgment that the company’s shareholders’ net worth exceeded the net property plan and equipment (PPE), showing that Net PPE was not acquired with depositors’ funds as claimed by Bank of Ghana.

Further, the company’s investment in Treasury bills alone, held by the Bank of Ghana on behalf of the Government of Ghana, which constituted 33.42% of the total deposits held by the company, exceeded the regulatory secondary reserves requirements of 20% (exceeding the regulatory requirement by 13.42%).

This shows that the company was capable of meeting the withdrawal demands of depositors, contrary to the claims of the Bank of Ghana.

The court also found that company’s non-performing loan ratio (NPR) which stood at 7.49% was one of the best in the banking industry at the time, and that although the best standard NPR was 5%, the company’s performance was better than the entire banking sector average which stood at 18.9% at the time Bank of Ghana revoked the company’s license.

The court therefore stated at page 59 of the judgment that “a careful perusal depicts that the rules of natural justice were ignored.

Therefore, the courts are clothed with the power to review the conduct of such administrative bodies to determine if it has acted in error; the court has power to intervene, stop and reverse such an act”.

This, the court stated, formed the basis for the holding that the decision of Bank of Ghana in revoking TI Microfinance’s license “was illegal, unreasonable, unfair and above all not in conformity to the tenets of administrative justice as guaranteed under article 23 and 296 of the 1992 Constitution”.

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