Chief Executive Officer of Dalex Finance, Ken Thompson, says the latest revelations in Ghana’s banking sector must trigger immediate prosecution of individuals involved.

“Ghana is a democratic country so, they should be put before a court of competent jurisdiction.

“If they are found culpable, lock them up, take the key and throw it into the Odaw River,” he said.

The Odaw River flows from the Abokobi and Adjankote hills through Ashongman, Atomic Energy area, West Legon, Achimota, Alajo, Avenor, Agbogbloshie and finally into the Atlantic Ocean through the Korle Lagoon.

Sharing his thoughts on the recent breach of Bank of Ghana, BoG, regulations by some local banks, the financial analyst said he was startled by the gross violations of institutions that had all along presented themselves as professional entities.

According to him, the trend if not immediately halted would adversely affect the influx of investors, as it would create unnecessary uncertainties in the sector.

“We shouldn’t joke with this at all. I am totally amazed; I am shocked at the kind of breaches or violations I am seeing.

“Those who perpetuated this should be on the firing line. It is scandalous for financial institutions to dissipate funds of ordinary Ghanaians,” Ken Thompson added.

While urging the relevant government agencies to act against those cited in the BoG report, Mr Thompson insisted that persons like Dr Mensa Otabil should be on the firing as he is complicit in the alleged crimes committed.

The Facts of the Matter

There are fresh revelations by the Central Bank detailing what auditors term “willful deceit” on the part of shareholders and directors of defunct UT and Capital Banks.

A 2014 Bank of Ghana (BoG) Examination and Inspection Report by Boulders and Advisors Limited also found that there was a significant amount of inter-group lending within the two banks.

This was after a review of two forms of related party transactions; first was loans granted to individuals and companies related to the bank and loans granted to companies connected to one another by ownership and directorship but unrelated to the bank group.

The Central Bank revoked the license of two commercial banks – UT Bank and Capital Bank in August last year.

The action was triggered by the inability of the two banks to turn around their negative capital adequacy position which has lingered on for some time now.

This has become topical following the recent closure of five struggling banks last week with BoG announcing it has created the Consolidated Bank Gh. Ltd to take over.

Sovereign Bank, Royal Bank, The Beige Bank, Construction Bank and Unibank are the five financial institutions that have run into liquidity challenges.

Detailing their findings on UT and Capital Banks, the Report said, “Capital Bank was a web of transactions involving insider parties, that is, directors, shareholders and their related companies.”

How Capital Bank officials wasted the tax payers’ money

The board after receiving the cash dished out ¢27.5m to a Board member to hype the business. The word in the report was “business promotion”. While still under distress but having received the bail-out, the board approved an expenditure of ¢2.6M and $50,000 on “re-branding.”

The board also “ratified” a proposal to increase the fees and benefits of directors, including two first and business class air tickets for all members of the board.

Not done, some 130m was transferred to Alltime Capital, a transfer that needed some explanation from the CEO Ato Essien who said the transfers were “strategic,” and “highly classified information.”

The transfers were expected back into the bank by March 2016 – in five months, he said with additional assurance from the chairman, Dr. Mensa Otabil.

All time Capital, all this time, was however acting as an arranger for the transfer of the ¢130m to two other companies.

MC Management Services Ltd owned by one Dr. Tetteh Nettey and Abdul Rahman Abukari got ¢100m cedis and Pronto Construction and Supplies Ltd owned by one Paanii Tackie who got ¢20m.

While Alltime Capital got 130m, Nordea Capital also got ¢65m of this Bank of Ghana aid money to Capital Bank.

Capital Bank sat back to watch their money working itself up and working itself back into their hands.

The GCB in 2017, took over Capital Bank and UT Bank under a purchase agreement approved by the Bank of Ghana.

The Governor of the Bank of Ghana, Dr Ernest Addison, speaking at the time, blamed the lack of good corporate governance for the collapse of the two banks.

He added, “the revocation of banking licenses of UT and Capital bank due to significant capital deficiencies, also partly reflected poor corporate governance practices within these institutions”.

Dr. Addison stressed that good corporate governance is not only essential to minimizing risk but it is also fundamental to improving economic performance.

GCB Bank has since absorbed about four hundred workers.