On Friday, 4 January 2019, central bank Governor Dr Ernest Addison told journalists that: “The issue of Heritage Bank, I wanted to get into the law with you, I don’t know if I should, but we don’t need the court’s decision to take the decisions that we have taken. We have to be sure of the sources of capital to license a bank, if we have any doubt, if we feel that it’s suspicious, just on the basis of that, we find that that is not acceptable as capital. We don’t need the court to decide for us whether anybody is fit and proper, just being involved in a case that involves a criminal procedure makes you not fit and proper”.

Prof Gatsi, however, told Benjamin Akakpo on Class91.3FM’s Executive Breakfast Show on Monday, 7 January 2019 that: “I think the central bank has not been above board”, explaining: “Some of the utterances, especially the one you just played [of the Governor]”.

“You see, when you are talking about criminal offences, they attract severe punishment. Therefore, ordinarily, you cannot be judging people when you are playing your regulatory role”, Prof Gatsi noted, demonstrating that: “For example, I don’t have the facts, but is the Governor saying that if tomorrow, all those people who are owning financial institutions, and the next government or whoever is in power decides that: ‘I have a case against any of you, and I’m trying that case in court, because of that, because you’re being prosecuted, [although] you have not been declared a criminal by the court, that is sufficient to withdraw your licence?’”

“I think the precedent we are setting is so dangerous for the country, it’s so dangerous for the financial sector. Of course, he himself [Dr Ernest Addison], indicated that it’s a process, it’s dynamic. [So], what of waiting if the court rules that this person is a criminal and based on that you withdraw the licence. But you have withdrawn the licence expecting that they will rule against him that he is a criminal. So, I think that precedent shows that the Bank of Ghana is not above board”.

In Prof Gatsi’s estimation, the complicity of the Bank of Ghana in the crisis within the sector is worrying. “The Bank of Ghana has a whole department for banking supervision. This banking supervision, they have the power, they go out, they visit the banks, they receive monthly reports, they go through these monthly reports, they have a legal department, they have all those things. So, if you go through all this process and these things happen, you are part of the problem. Therefore, when you want to solve the problem, you don’t play an angel”.

He nonetheless pointed out that the central bank’s failure to have detected anomalies ab initio, as far as the setting up of some errant banks is concerned, does not preclude it from triggering the necessary remedies if those anomalies are later detected.

He, however, believes the Bank of Ghana has acted prematurely and unfairly as far as the revocation of Heritage Bank’s licence is concerned since the majority shareholder’s case with the state could go either way.

“You have withdrawn the licence of a bank based on the fact that the person is in court, so, you have concluded that he’s not a fit and proper person. Then, the question is: If that person is cleared by the court, what will you do? That is one. Then number two, you find a situation where some of these banks that you are talking about, they provide reports to the Bank of Ghana. The Bank of Ghana receives their audit reports from the auditors, they do investigations etc., what prevents them from acting on what they found, or they just kept the findings? So that is a problem”.

Prof Gatsi, who is also a lawyer, said the fact that the Act and legal framework governing the work of the Bank of Ghana empowers the regulator to take certain punitive and corrective actions does not mean those measures can be taken independently of the provisions of the 1992 Constitution or in oblivion to the rights and dignity of the persons affected.

“Let us all understand that there’s no Act which supersedes the rights and the dignity of a person as enshrined in our Constitution. No Act, including the Companies Act, is above the provisions of the Constitution. … The Banking Act is not an Act that gives absolute power to the Governor. The Governor must exercise that power considering that people have rights, people’s fundamental rights should not actually be severely endangered”.

Although he supports the Bank of Ghana in ensuring that those in the sector are fit and proper players, Prof Gatsi said shoving aside the ongoing court case and going ahead to take punitive action against Heritage Bank raises concerns.

“So, if you are not fit and proper, it means that per the rules of the Bank of Ghana, or per the rules of the regulator, you have not measured to the level of standard that you should have in society in order to operate a bank. You need to be somebody who is raising funds from the right source, that is key; you shouldn’t be declared by a court that you are insolvent before, you shouldn’t be declared by a court of competent jurisdiction that you are a criminal, so to say, or you have been found to be guilty of fraud and all those things.

“Remember I’m using the word: ‘You should be found by the court’, which means a process has actually been exhausted and a declaration is made by the court”.

“I think the appropriate thing to have been done is to avoid all these questions that we are dealing with because the matter is before the court and we need to limit our discourse in relation to the matter. But it’s clear that you would have been unfair to the person, and unfairness is not promoted by the Constitution. … You [Bank of Ghana] are saying that it’s [Heritage Bank] not insolvent, your eye is on that bank, I don’t know how long the matter will travel, you could still wait for some time for the court to actually decide on the criminal matter because you’re linked to it.

“So, if at the end of the day, the court clears the person, it means that you have been unjust. And remember, you have already added that bank to the Consolidated Bank Ghana Limited, then it becomes very technical and a very difficult issue to deal with. And if you like, the person can go to court and if the court actually understands his case and then rules in his favour, then we are going into a whole complex issue of execution etc., so, we should have avoided all these possibilities we are discussing and then do what I think in my opinion should have been a fairer way of dealing with the matter”, Prof Gatsi said.