Staff of the First Ghana Savings & Loans (FGSL) Limited have set a deadline for the Bank of Ghana to rescind its decision to revoke their license.
First Ghana Savings & Loans wants government to restore the company’s license to enable it serve its customers, including pensioners by September 11, 2019.
The Company, in which NIB has a majority stake, was among the 23 savings and loans companies and finance houses whose licenses were revoked by the Bank of Ghana (BoG) on August 16, 2019.
Among the reasons the Bank of Ghana gave for revoking the license of the institution was the fact that they had a negative net worth of GHC 14.08 Million and a capital adequacy ratio of negative 54.47 per cent as at May 2019.
The NIB had more than 88.4 million shares constituting 97.98 percent, the Ministry of Finance had 10,500 shares, constituting 0.02 per cent while individuals including staff-owned 1.81 million shares constituting two per cent.
The convener of the Professional and Managerial Union of First Ghana Savings & Loans, Robert Agbodza , at a news conference in Accra on Wednesday, said an additional capital of GH¢20 million would have saved the company and that government through the majority shareholder National Investment Bank (NIB), must be blamed 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 license. 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 license.”
Commenting on the negative net worth and capital adequacy ratio, the irate staff mentioned that the Bank of Ghana’s report failed to mention that the negative net worth and the negative CAR were arrived at after First Ghana Savings & 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).
Also, before NIB acquired the majority shareholding in FGSL Limited in 2014, Mr Agbadza said the Board was controlled by the state through NIB, the Ministry of Finance and the Ministry of Water Resources, Works and Housing.
“Even the capital injected by NIB in FGSL, the fund was directly invested at uniSecurities by NIB Management with the strictest instruction to the Management of First Ghana Savings & Loans not to touch it. A challenge of such decision by the Board resulted in the then Acting Managing Director being asked to proceed on 109-day leave,” he said.
According to the convener, it was difficult to understand why the NIB stood in the way of other investors who were willing to inject more capital into FGSL if they knew they were not in the position to do so.
He said over 130 employees in the 10 branches of the company across the country had become jobless, saying, they were really in a turbulent time.
First Ghana Savings & Loans Limited which started as First Ghana Building Society (FGBS) in 1956 was originally licensed to operate as a mortgage financing institution.
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From March 8, 2015, to 16th August 2019, the company served as the only savings and loans company in Ghana with over 50 per cent of its customers being pensioners on the payrolls of SSNIT and the Controller and Accountant Generals Department.
