The Supreme Court has ruled in favour of Universal Merchant Bank (UMB), affirming the bank’s decision to dismiss its former Managing Director, Peter Illiasu, over financial mismanagement and unauthorised transactions dating back to 2010.

On January 22, a five-member panel of justices, led by Chief Justice Gertrude Sackey Torkornoo, unanimously upheld UMB’s case. The other justices on the panel were Justices Amadu, Professor Henrietta Mensa-Bonsu, Asiedu, and Darko Asare.

The ruling followed a long-standing legal dispute in which the bank accused Illiasu of breaching statutory banking regulations and exceeding his authority in approving multimillion-dollar loan facilities. According to court records, he sanctioned credit transactions that violated the bank’s lending limits and internal policies.

A key issue in the case was an unauthorised transaction involving GHS349,593.75 from Volta River Authority’s (VRA) account. The court found that Illiasu had improperly approved the payment to Abi Capital without VRA’s consent. The payment was linked to what was described as brokerage or due diligence fees, but the court ruled that neither the service nor the transaction was lawfully entered into.

Additionally, the court held that Abi Capital was aware of the illegality of the credit facility and, therefore, jointly liable with Illiasu. As a result, both parties have been ordered to refund the GHS349,593.75 with interest, calculated at the bank’s lending rate from April 21, 2010, until full repayment.

In delivering its judgment, the Supreme Court underscored the responsibilities of bank directors to uphold statutory banking regulations and corporate governance principles. It found that Illiasu had not only violated his contractual obligations to UMB but also breached his fiduciary duty as a director, leading to financial losses for the bank.

This ruling marks the conclusion of a protracted legal battle, reinforcing the Supreme Court’s stance on accountability in financial institutions.

JUDGMENT - UMB VRS ABI CAPITAL FINANCIAL SERVICES LTD & ANORDownload