Labour expert, Senyo Adjabeng, wants the new owner of UT Bank and Capital Bank to ensure that the rights of employees at the two banks are protected when it is taking retrenchment decisions.
Mr Adjabeng wants the Ghana Commercial Bank (GCB) to prevent any decision that would cause a lawsuit from any of the over 900 combined staff of the two former distressed banks.
Poor staff treatment, the ADR expert notes “are normally the tricky aspects of takeovers, mergers and acquisitions if not handled well will create disputes that end up making employers burning their fingers.”
Photo: Senyo Adjabeng
The Bank of Ghana announced the surprise revocation of the licenses of UT Bank and Capital Bank, following the inability of the two banks to turn around their negative capital adequacy position which has lingered on for some time now.
“UT Bank and Capital Bank were deeply insolvent, meaning that their liabilities exceeded their assets, putting them in a position not to be able to meet their obligations as and when they fell due. Despite repeated agreements between the Bank of Ghana and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls, the owners and managers of UT Bank and Capital Bank were unable to increase the capital of the banks to address the insolvency.
“Consequently, to protect customers, the BOG has decided to revoke the licenses of UT Bank and Capital Bank under a Purchase and Assumption transaction,” the central explained in an official release.
The central bank has ordered the GCB to take over the assets of the two banks – literally causing the two troubled to cease to exist.
BoG opens probe
The Central Bank has said some officials of the two collapsed banks will be prosecuted if they are found to have breached its regulations in the discharge of their duties.
Head of Supervision at the Bank of Ghana, Raymond Amanfo, said investigators are probing the circumstances that led to the collapse of UT and Capital Banks.
He said there are issues about loans given under some suspicious circumstances.
“Is there anything showing the loans were not granted [under the right process]?” he asked, adding this form part of the many things that are being investigated.
Economist lauds takeover
Economist, Dr John Gastsi, has said the decision by the Bank of Ghana for GCB to take over UT and Capital banks is an decision.
According to him, the timely decision will protect the integrity of the banking sector and also the customers of these banks.
“If you are very close to the banking sector, you will know that some of these banks were having serious difficulties, especially UT bank. I think over the past two years, we have not had any access to their annual reports which actually is a requirement by listed companies,” he told Accra-based radio station, Class FM.
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