The Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, has called for stronger collaboration between the judiciary and financial regulators in
The Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, has called for stronger collaboration between the judiciary and financial regulators in the effective implementation of the insolvency and beneficial ownership laws.
He made this call while delivering the keynote address at a two-day judicial sensitisation programme organised by the Office of the Registrar of Companies (ORCs) for selected judges of the judiciary at the Peduase Lodge in Aburi.
The programme, themed “Judicial Sensitisation on Insolvency and Beneficial Ownership Laws,” brought together senior judges, legal experts, and financial regulators to deepen understanding of the evolving legal frameworks governing corporate restructuring, insolvency, and financial accountability in Ghana.
Background and Context
The sensitisation initiative forms part of a broader effort by the Office of the Registrar of Companies, led by Maame Samma Peprah, to equip the judiciary with contemporary knowledge on corporate governance, restructuring, and insolvency management.
It comes at a time when the financial and corporate sectors continue to undergo reforms aimed at ensuring transparency, accountability, and stability following the banking sector clean-up between 2017 and 2019.
The Bank of Ghana, a key stakeholder in Ghana’s financial regulation, has been at the forefront of promoting a sound corporate insolvency regime through the Corporate Insolvency and Restructuring Act, 2020 (Act 1015) and the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
Dr. Asiama noted that both Acts provide the legal backbone for managing financially distressed companies and ensuring the protection of depositors, creditors, and the broader economy.
The Role of Act 1015 and Act 930
In his address, the BoG Governor underscored that the passage of Act 1015 marked a transformative moment in the corporate governance landscape, introducing a modern and structured framework for managing insolvency and business recovery.
“The Corporate Insolvency and Restructuring Act provides clear conditions for placing companies into administration and outlines the responsibilities of administrators and restructuring officers. It offers significant potential in addressing corporate insolvency through effective debt workouts and restructuring,” he explained.
Dr. Asiama added that the Bank of Ghana, through Act 930, has also been empowered to regulate banks and specialised deposit-taking institutions, providing mechanisms for early intervention and corrective actions when financial institutions show signs of distress.
Understanding the Causes of Insolvency
The Governor highlighted multiple causes that typically lead to the collapse or insolvency of banks and financial institutions, citing poor corporate governance, insider dealings, weak board oversight, and non-compliance with prudential requirements.
Other triggers, he said, include excessive risk-taking, misuse of depositors’ funds, poor investment decisions, and the lack of capital adequacy to sustain operations.
These, he emphasized, often result in toxic assets, unrecoverable loans, and severe liquidity challenges.
“The Bank of Ghana takes insolvency seriously and works diligently through its regulatory and supervisory roles to prevent regulated financial institutions from becoming insolvent,” Dr. Asiama said.
Judicial Oversight And Dispute Resolution
Touching on the critical role of the judiciary, Dr. Asiama explained that while regulators have the mandate to enforce insolvency resolutions, the courts play an equally vital role in ensuring fairness, legality, and adherence to due process.
He referenced Section 141 of Act 930, which requires that grievances relating to bank resolutions or regulatory interventions be handled through arbitration under the Alternative Dispute Resolution Act, 2010 (Act 798).
However, he also cited the Supreme Court’s ruling in the landmark case Dr. Papa Kwesi Nduom & Others v. Bank of Ghana & Others (GN Bank) — Civil Appeal No. J4/07/2023 — which held that the Human Rights Court has jurisdiction over bank resolution cases involving alleged breaches of administrative justice.
“This case underscores the critical role of judicial oversight in ensuring that bank resolution processes are carried out within the legal framework and in accordance with the rules of natural justice,” he noted.
Balancing Judicial Intervention And Financial Stability
Dr. Asiama cautioned that while judicial review is essential, courts must exercise restraint in cases involving regulatory decisions on insolvency, as adverse rulings could undermine financial stability.
“Adverse court determinations against regulatory decisions can create legal uncertainty, unwind contractual arrangements, reverse receiver actions such as asset sales, and risk financial instability,” he warned.
Quoting from the Financial Stability Board’s (FSB) Key Attributes for Effective Resolution Regimes (April 2024), he highlighted that legislation should not allow judicial actions that constrain or reverse lawful resolution measures taken in good faith. Instead, the law should provide for redress through compensation where justified.
Judicial Efficiency and Timeliness
The Governor further urged the judiciary to ensure timeliness in adjudicating insolvency and restructuring cases, noting that prolonged proceedings can erode asset values and harm creditors and shareholders.
“Insolvency proceedings are dynamic and time-sensitive. Delays can diminish the value of assets and threaten enterprise viability. It is therefore crucial for courts to deliver prompt rulings to safeguard the integrity of the process,” he said.
Ongoing Legal Reforms
Dr. Asiama revealed that Act 930 is currently under review to clarify the Bank of the powers in bank resolution, strengthen financial stability provisions, and improve the credibility of the financial resolution regime.
“These reforms will ensure that distressed institutions are handled in an orderly manner that protects depositors, sustains confidence, and preserves financial system integrity,” he added.
Conclusion And Way Forward
In conclusion, the BoG Governor expressed optimism that the sensitisation programme would help bridge the knowledge gap between regulators and the judiciary, enhancing cooperation in the interpretation and enforcement of financial and corporate laws.
“It is my firm belief that this programme will strengthen the implementation of Acts 1015 and 930, support judicial efficiency, and promote Ghana’s broader economic resilience,” Dr. Asiama said.
He reaffirmed the Bank of Ghana’s commitment to supporting national economic growth, ensuring a sound banking system, and upholding an effective corporate insolvency regime that fosters investor confidence and economic stability.
The two-day programme ended with interactive sessions between judges and financial regulators on the practical aspects of insolvency cases, corporate restructuring, and beneficial ownership compliance — a critical step toward modernising the judicial understanding of corporate and financial law.
COMMENTS