Ato Essien cries foul against BoG’s report… but parliament wades into the case


Image result for William Ato Essien and bank of ghana

Adnan Adams Mohammed

The former Chief Executive Officer and majority shareholder of beleaguered Capital Bank, William Ato Essien has refuted the report of Bank of Ghana on his collapsed bank and others, which gives account of what actually happened that caused the collapse.

He described the report as “factually incorrect”.

However, the Finance Committee of Parliament is preparing to tackle the crisis in the country’s banking sector in a move that may feature public hearings to probe officials of collapsed banks.

According to the ranking member on Parliament’s Finance Committee, Cassiel Ato Forson, the leadership of the committee has resolved to investigate the crisis even though the House is currently on recess.

A statement issued by his lawyers revealed that, Ato Essien has been under investigation by the Economic and Organized Crime Organization (EOCO) for the past six months over the matter.

“There are several aspects of the circulating reports that are factually incorrect,” a statement from his lawyers said.

The statement noted that, “Our client and other directors/shareholders have been thoroughly investigated by the Economic and Organized Crime Office (EOCO) over the last six months which is continuing… As far as our client is aware of, EOCO has not issued its findings on the investigations yet.”

It added that “we urge the press to, therefore, be circumspect in their reportage and await the outcome or findings of the EOCO investigations.”

He said other directors and shareholders of the defunct bank are also being investigated.

A detailed assessment of the woes of Capital Bank and other local banks that were recently collapsed by the Bank of Ghana over their insolvency revealed that Ato Essien with the approval of the board chairman used monies it received from the Central Bank as financial support for other uses including securing the license for another ultimately collapsed bank, Sovereign Bank.

The BoG in the report also said Essien flouted all banking and risk management rules in the management of monies saved at the bank by its customers and treated the funds as a personal piggy bank.

The Ajumako Enyan Essiam MP says the committee is working on ironing out the modalities for the parliamentary probe.

“I can confirm to you that I have had a conversation with the Chairman of the Finance Committee and we have agreed that the Finance Committee of Parliament will have to consider some hearings relating to all the stakeholders concerning the collapse of the banks.”

Parliament is currently on recess, and the committees will have to agree on a timetable when the MPs arrive back in Accra, he explained.

The committee will also need the blessings of the leadership of the MPs.

“For us to go on, we will have to get the leaders of Parliament; both the Majority and Minority leader to be in sync with our position,” Mr. Ato Forson confirmed.

In the past year, seven banks have collapsed: Capital Bank, uniBank, Sovereign Bank, Construction Bank, The Beige Bank, UT Bank and Royal Bank.

A recent investigative report further entrenched the sentiment that the directors and boards of these banks were guilty of gross mismanagement.

The report noted that Capital Bank misused a significant amount of support from the Bank of Ghana (BoG) when it was struggling.

Among the flagged transactions were GHC27.5 million used for business promotion and handled by a board member; transfers to IFS amounting to GHC23.9 million, transfers to Nordea Capital amounting to GHC65 million, and transfers to All-Time Capital amounting to GHC130 million.

Part of this amount is believed to have been used to set up Sovereign Bank, which also collapsed.

On the UT Bank side of things, payments were made to former Chief Executive Officer and Director Mr. P.K Amoabeng from a loan defaulting entity, Kofi Jobs Limited.

The loans which amounted to GHC 5m were never disclosed to the Board of the U.T Bank.

The report also revealed that there was a significant amount of inter-group lending involving other subsidiaries of the holding company, UT Holdings, while connected party loans were made to some companies
Meanwhile, many organized groups including the Christian Council of Ghana have called for the prosecution of persons whose actions led to the collapse of Capital the other collapsed banks.

Speaking at the 2018 Synod of the Global Evangelical in Accra, General Secretary of the Christian Council of Ghana, Cyril Fayose who lauded the Bank of Ghana for consolidating Capital Bank and 4 other local banks into the Consolidated Bank of Ghana said all persons responsible for the collapse of these banks must be made to face the full rigors of the law especially as their actions have taken a serious financial toll on the country.

We also want to place on record that the Christian Council of Ghana thinks that all those who are culpable in this matter, be they staff of the Bank of Ghana or directors of the closed banks should be prosecuted.

“They should face the full rigors of the law as much as possible because the amount of money we hear has gone into this bailing out of these banks is enough to do a lot of social interventions in our country, Rev. Fayose said.

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