6 Banks to sue Legon over unpaid loans

The amount represents the banks’ contribution to the overall cost of the project, which includes infrastructure, services and furnishing.

The banks have vowed to go to court in order to take over 12,500 beds in the hostels due to the delay in the payment of the amount.

The Managing Director of CAL Bank, Mr Frank Adu Jnr., who made this known to the Daily Graphic in an interview, said the banks had decided to resort to court action owing to the delay in the payment of the loan.

He was speaking on the sidelines of the bank’s Facts behind the Figures presentation at the premises of the Ghana Stock Exchange in Accra last Tuesday.

“The government in 2012 pledged to take over the payment of the loan, but as of now we are yet to see that materialise into actual payment so we have decided to go to court,” Mr Adu said.

When asked why the banks were demanding to take over 12,500 beds although their share of the project amounted to only 7,000 beds, Mr Adu explained that the “the banks built 7,000 beds but the agreement guaranteed us 12,500 beds as security and we are willing to push for that.”

Agreement

As part of efforts to solve the accommodation problems confronting students, the University of Ghana, through the University of Ghana Enterprise Limited (UGEL) in 2007, entered into an agreement with the six banks to build hostel facilities to meet the accommodation demands.

Under the agreement, the syndicate, led by the CAL bank, provided GH¢26 million for the project which was meant to accommodate 7,000 students, while the university provided GH¢4.2 million.

The agreement led to the construction of four new halls of residence.

These are the Hilla Limann; Alex Kwapong, Elizabeth Sey and the Jean Nelson Halls.