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Non-Performing Assets (Loans, Investments) Recovery Act, 1996

Act 518 of 1996

Non-Performing Assets (Loans, Investments) Recovery Act, 1996
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Citation
Act 518 of 1996
Date
11 October 1996
Language
English
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Ghana

Non-Performing Assets (Loans, Investments) Recovery Act, 1996

Act 518 of 1996

AN ACT to establish the Non-Performing Assets Recovery Trust and for related matters.

Part I – Establishment of Trust, its objects and functions

1. Establishment of the Trust

(1)There is hereby established a body to be known as the Non-Performing Assets Recovery Trust referred to in this Act as "the Trust".
(2)The Trust shall be a body corporate with a common seal and may sue and be sued in its corporate name.
(3)The Trust may for the discharge of its functions under this Act acquire, hold and dispose of any movable or immovable property or enter into any contract or transaction.

2. Objects of the Trust

The objects of the Trust are—
(a)to hold for and on behalf of the State any non-performing asset of a bank which is transferred to the Trust under this Act;
(b)to take such action as may be necessary to recover the amounts outstanding in respect of the transferred non-performing asset; and
(c)to administer and manage the Non-Performing Assets Recovery Fund established under this Act.

3. Transfer of non-performing assets

Notwithstanding any law or agreement to the contrary, any bank in Ghana shall at the direction in writing of the Trust transfer to the Trust such of its non-performing assets—
(a)as are in existence at the commencement of this Act; or
(b)as may exist as determined by the audited account of the bank on the 31st day of December, 1989 if the loans and advances or equity investments were actually on the books of the bank on the 30th day of June, 1987, even if not identified or determined at that time to be non-performing.

4. Action by Trust in respect of transferred assets

The Trust shall in respect of any non-performing asset transferred by a bank under section 3 of this Act cause to be paid to the bank for the transferred asset from the Fund established under section 6 of this Act such sum as may be determined by the Trust—
(a)at such rate;
(b)in such form; and
(c)subject to such other terms and conditions as the Trust may determine.

5. Vesting of transferred asset

The assets, rights and obligations attached to a non-performing asset transferred by a bank under this Act which immediately before the date of the transfer, were held by that bank shall vest in the Trust.

6. Establishment of Non -Performing Assets Recovery Fund

(1)There is hereby established a Non-Performing Assets Recovery Fund referred to as "the Fund" into which shall be paid the monies Recovery Provided by the Government or other sources to the Trust and proceeds from recoveries made on assets vested in the Trust.
(2)There shall be paid out of the Fund by the Trustees such sums of money as may be required by the Trust under this Act.

7. Powers of the Trust

(1)The Trust shall exercise such powers and take such actions as it considers advantageous or necessary for or in connection with the achievement of its objects under this Act.
(2)Subject to subsection (1) of this section the Trust may—
(a)sell at the best price possible, enterprises or ventures the subject of any transferred non-performing assets or the assets of the enterprises or ventures;
(b)take such actions as may be necessary for the recovery of non-performing assets;
(c)negotiate and reschedule payments of the transferred non-performing assets;
(d)take any other action which is incidental to the objects of the Trust.

8. The Board of Trustees

(1)The governing body of the Trust shall be a Board of Trustees referred to in this Act as “the Board”.
(2)The Board shall consist of the following members appointed by the President acting in consultation with the Council of State—
(a)a Chairman;
(b)a representative of the Ministry of Finance;
(c)a representative of the Bank of Ghana;
(d)the Chief Administrator of the Trust;
(e)a chartered accountant from the private sector;
(f)a lawyer knowledgeable in corporate law from the private sector; and
(g)three other persons with sound knowledge or experience on matters pertaining to the objects of the Trust at least one of whom shall be from the private sector.
(3)There shall be a Vice-Chairman of the Board who shall be appointed from members by the President acting in consultation with the Council of State.
(4)The members of the Board shall hold office for the duration of the Trust but the membership may be renewed for such further periods as the President may determine.
(5)A member of the Board, other than an ex-officio member may resign his office by writing addressed to the President through the Minister and the President may remove a member from the Board for stated reasons.
(6)The members of the Board shall be paid such allowances as may be determined by the Board with the approval of the Minister for Finance.

9. Functions of the Board

The Board of Trustees shall be responsible for the formulation of policies and the supervision of the management of the Trust and shall exercise the powers conferred on the Trust under this Act.

10. Meetings of the Board

(1)The Board shall meet for the despatch of business at such times and places as the Board may determine but shall meet at least once in every month.
(2)At every meeting of the Board at which he is present, the Chairman shall preside but in his absence the Vice-Chairman shall preside.
(3)Decisions of the Board shall be determined by a simple majority of members present and voting and in the event of equality of votes the Chairman or the person presiding shall have a second or casting vote.
(4)The quorum at any meeting of the Board shall be six.
(5)The Board may at any time co-opt any person to act as an adviser at its meeting, but the co-opted person may not vote on any matter for decision of the Board.
(6)Any member of the Board who has an interest financial or otherwise, whether direct or indirect, in any undertaking which is the subject matter of a decision before the Board, shall disclose in writing to the Board the nature of his interest and shall not participate in any discussion or decision of the Board relating to the matter.
(7)Any member of the Board who fails to disclose his interest under subsection (6) of this section commits an offence and shall be removed from the Board, and shall on conviction be liable to a fine not exceeding ¢500,000 or to imprisonment for a term not exceeding six months.
(8)Except as otherwise provided in this section the Board shall regulate its own procedure.

11. Committees of the Trust

The Board may appoint committees to perform such functions or advise the Board on such matters as the Board may direct.

12. Chief Administrator

(1)There shall be appointed by the President in accordance with the advise of the Board given in consultation with the Public Services Commission a Chief Administrator of the Trust.
(2)The Chief Administrator shall hold office on such terms and conditions as shall be specified in his letter of appointment.
(3)The Chief Administrator shall, subject to such directions as may be given by the Board be responsible for the day-to-day administration of the Trust and shall be accountable to the Board.

13. Staff of the Trust

(1)The Trust may from time to time engage such employees, consultants and advisers as may be necessary for the proper and efficient performance of its functions under this Act.
(2)Appointment of staff of the Trust shall be made by the President in accordance with the advice of the Board given in consultation with the Public Services Commission.
(3)Other public officers may be transferred or seconded to the Trust.

14. Protection of Trustees employees of the Trust

Subject to article 293 (2) of the Constitution no act of a Trustee or a staff member of the Trust shall where the act was done in good faith in the course of his employment, subject the employee or any person acting under his direction, personally, to an action, liability or claim.

Part II – Establishment of Loans Recovery Tribunal

15. Establishment of Tribunal

There is hereby established a tribunal to be known as the Non-Performing Assets Recovery Tribunal referred to in this Act as “the Tribunal”.

16. Composition of the Tribunal

The Tribunal shall consist of—
(a)a Chairman who shall be a judge of the Superior Courts not below the rank of a Justice of the Court of Appeal or a person qualified to be appointed to that office; and
(b)two other persons
who shall be appointed by the President in accordance with the advice of the Chief Justice given in consultation with the Public Services Commission.

17. Jurisdiction and power of Tribunal

(1)The Tribunal shall have original exclusive jurisdiction to hear and determine matters arising under this Act or relating to any non-performing asset transferred to the Trust under this Act.
(2)The Tribunal shall in the exercise of its jurisdiction under this Act have the powers of a High Court of Justice and for that purpose the civil procedure rules applicable to civil actions before the High Court shall apply to actions before the Tribunal.

18. Judgement of Tribunal and Execution of judgement

(1)Judgments and orders of the Tribunal shall be executed and enforced in the same manner as judgments and orders of the High Court.
(2)The Tribunal may review its own judgment or orders.
(3)The Supreme Court shall have supervisory jurisdiction over the Tribunal.

19. Procedure of Tribunal

(1)The Tribunal shall in the exercise of its functions under this Act be guided by the rules of natural justice.
(2)Without prejudice to the general effect of subsection (2) of section 17 of this Act the Tribunal shall in the discharge of its functions under this Act have the powers of a High Court of Justice in respect of—
(a)enforcing the attendance of witnesses and examining them on oath, affirmation or otherwise;
(b)compelling the production of documents; and
(c)the issue of a commission or request to examine witnesses abroad.
(3)The Tribunal shall at any time be deemed to be duly constituted if the Chairman and one other member are present.
(4)Any decision shall be deemed to be a decision of the Tribunal if it is supported by a majority of the members.
(5)A witness before the Tribunal shall have the immunities and privileges as if he were a witness before the High Court.

20. Registrar and other staff of Tribunal

(1)The President shall in consultation with the Chief Justice appoint an officer to be designated as the Registrar for the Tribunal.
(2)The President shall appoint staff for the Tribunal in accordance with the advice of the Chief Justice given in consultation with the Public Services Commission.

21. Expenses and allowances

The members of the Tribunal, the Registrar and staff of the Tribunal shall be paid such remuneration and allowances as the Minister may determine.

22. Obstruction of Tribunal

(1)Any person who—
(a)when summoned to attend a witness before the Tribunal, refuses to attend or fails without reasonable excuse to attend; or
(b)being in attendance as a witness refuses to take an oath or to make an affirmation required by the Tribunal; or
(c)makes any statement before the Tribunal which he knows to be false or which he has no reason to believe to be true; or
(d)omits or suppresses any information required by the Tribunal in the discharge of its functions or relevant to the discharge of those functions; or
(e)in any manner misleads, obstructs, insults or disturbs the Tribunal,
commits an offence and is liable on conviction to a fine not exceeding ¢500,000.00 or to imprisonment for a term not exceeding six months or to both.

Part III – Financial and miscellaneous provisions

23. Accounts and audit

(1)The Trust shall keep books of accounts and proper records in relation to them and the books of account and records of the Trust shall be in a form approved by the Auditor-General.
(2)The books of account of the Trust shall be audited by the Auditor-General within six months after the end of each financial year.
(3)The audited accounts shall be submitted to the Board not later than three months after the end of the financial year to which they relate.
(4)The Board shall as soon as possible but in any case not later than one month after receipt of the report of the Auditor-General forward the report to the Bank of Ghana and the Minister.
(5)The financial year of the Trust shall be the same as the financial year of the Government.

24. Annual report

The Board shall not later than four months after the end of each financial year submit to the Minister an annual report on the management of the Trust in respect of that financial year and the Minister shall submit the report together with his observations on it to Parliament.

25. Tax relief

The Trust shall be exempted from the payment of taxes, rates and duties.

26. Payments of proceeds into the Consolidated Fund

The Trust shall transfer on a quarterly basis into the Consolidated Funds the proceeds from recoveries made on assets vested in the Trust the lodged in the Fund.

27. Regulations

The Minister may by legislative instrument make such regulations as may be necessary for the effective and full implementation of this Act.

28. Interpretation

In this Act unless the context otherwise requires—“bank” means any bank in existence in Ghana at the commencement of this Act;“Fund” means the Non-Performing Assets Recovery Fund established under this Act;“Non-performing asset” means—(a)loans and advances including—(i)any advances in respect of which the principal or interest or scheduled instalment thereof has remained overdue for any period specified by the Bank of Ghana by notice or regulation then in existence;(ii)any advance to a borrower who has subsequent to the granting of the advance gone into insolvency or whose industrial or commercial operation has remained unoperational for any period specified by the Bank of Ghana by notice or regulations;(iii)any overdraft in respect of which interest is due and unpaid or the overdraft is outstanding after the expiry of the authorisation or is consistently at or exceeding the credit limit for such period as the bank of Ghana may by notice or regulation specify, or in respect of which the credit limit is regularly increased by the bank; or(iv)any advance, overdrafts or guarantees for which the borrower is unable or unwilling to discharge his obligation to service the interest or principal repayment; or(b)investment in the nature of equity holdings, debentures or other commercial paper issued by a corporate body in Ghana where—(i)the body has suffered losses which in aggregate, exceed its paid up capital and declared reserves and surpluses; or(ii)insolvency proceedings have been initiated against the body; or(iii)the body's commercial or industrial operations have remained unoperational for a period longer than a period specified in notices or regulations issued by the Bank of Ghana and the marketability or realizable value has been substantially impaired exposing the bank to risk of loss;“Minister” means the Minister responsible for Finance;“Tribunal” means the Non-Performing Assets Recovery Tribunal established under this Act.

29. Repeal

(a)The following enactment is repealed—Non-Performing Assets (Loans, Investments) Recovery Law, 1990 (P.N.D.C.L. 242);
(b)The following instruments are revoked—Non-Performing Assets (Loans, Investments) Recovery Instrument, 1992(L.I. 1533); andNon-Performing Assets Recovery Tribunal (Adaptation to Constitution) Instrument, 1993 (C.I. 3).

30. Vesting of assets and transfers

(1)There shall be vested in the Trust the assets, rights, obligations and liabilities of the Non-Performing Assets Recovery Trust established under the Non-Performing Assets Recovery Trust Law, 1990 (P.N.D.C.L. 242).
(2)There shall be transferred to the Fund the monies in the Non-performing Assets Recovery Fund established under the Nonperforming Assets Recovery Trust Law, 1990 (P.N.D.C.L. 242).
(3)Any appointment made under the repealed enactment shall on the coming into force of this Act remain as if made under the corresponding provision of this Act until otherwise dealt with under this Act.

31. Duration of Act

This Act shall continue in force until the 30th day of June, 1997 and shall then expire unless Parliament extends its duration for a further period.

History of this document

11 October 1996 this version
Commenced
11 September 1996
Assented to
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