President has no power to dissolve BoG Board

 February 20, 2013 (Page 3 Lead)

The Fast Track High Court has declared that it is unlawful for the President of the Republic to dissolve the board of the Bank of Ghana (BoG) before the board has served its full term.

It said although the 1992 Constitution mandated the President of the Republic to appoint boards for state institutions, it was unlawful for the President to dissolve the BoG board before it had served its three-year mandate.

It, however, gave President John Dramani Mahama the green light to appoint a new board for the BoG following the expiration of the term of an interim board on February 18, 2011.

Giving its judgement in a suit instituted against the Attorney-General and the Governor of the BoG by Mr Sam Okudzeto over the dissolution of the BoG board in January 2009 when its term had not expired, the court held that “the act of the President in purporting to remove the plaintiff from membership of the board when his term had not expired was unlawful”.

In a 61-page judgement laced with numerous legal authorities, the presiding judge, Mr Justice K. N. Aduama Osei, a Court of Appeal judge who sat with additional responsibility as a High Court judge, however, held that the term of the interim board came to an end on February 18, 2011.

“After this judgement, therefore, new appointments can be made to the board of the BoG, in accordance with Act 612,” the court held.

Mr Okudzeto, through his lawyer, Nene Amegatcher, commenced an action on April 22, 2009, stating that he (Mr Okudzeto) was serving a three-year term on the board of the BoG when he received a letter dated January 28, 2009 and signed by the secretary to the board notifying all members of the board that, by a presidential directive, all boards of state institutions had been dissolved and for that reason the 569th meeting of the board of BoG had been cancelled.

Dissatisfied with the directive from the Presidency, Mr Okudzeto made several attempts to draw the then President’s attention to the illegality of the directive but they fell on deaf ears, thereby necessitating the legal action.

In its ruling, the court declared that “the purported removal of Mr Okudzeto and all other external directors of the board of the BoG whose fixed term had not expired under the governing law of the bank was illegal, void and of no effect”.

It further held that the purported appointment of new members to the board of the BoG when the fixed term of the plaintiff and other board members subsisted was a violation of the laws of the Republic and, therefore, void.

Touching on the plaintiff’s call for the setting aside of the then new board of the BoG, the court submitted that that call had been rendered ineffective because the  current term of the interim board had elapsed.

It, however, held that the plaintiff’s action was “not merely academic and hypothetical facts”, as alluded to by counsel for the BoG, adding that the issues raised by Mr Okudzeto were “on real controversies”.

The court said plaintiff’s action raised the issue “as to the extent of the powers of the President as the appointing authority under Act 612 and they are issues in which Ghanaians generally have an interest and which will benefit society if they are resolved definitively”.

“They are also issues in which the plaintiff, as a citizen, continues to have an interest, in spite of the fact that the term of the board of which he was a member has expired,” it submitted, adding, “The issues are very much alive.”

Tackling the subject of whether or not Mr Okudzeto deserved any compensation, the court was of the view that he (Mr Okudzeto) did not raise that issue in his claims and for that reason it “will refrain from making a case for the award of such compensation”.

According to the court, the plaintiff’s main concern was to have the issues determined “definitively that by the acts or deeds complained about, the Presidency has, to the personal detriment of the plaintiff, flouted certain statutory provisions and that as a citizen of Ghana, he has an interest to ensure that the illegality of those acts or deeds is declared and are perpetuated or repeated”.

“In that respect, the plaintiff has been vindicated and I do not intend to discuss the issue of monetary compensation.” it added.