Directors of collapsed banks, such as UniBank, UT, and Beige Bank, have the option to negotiate for settlements outside of court before the trial commences, as stated by Deputy Attorney General Alfred Tuah-Yeboah.
While the state remains committed to prosecuting the directors of these financial institutions, this approach offers an avenue for resolution.
This announcement follows the recent imprisonment of William Ato Essien, the former Chief Executive Officer of the now-defunct Capital Bank, who was convicted of embezzlement.
“We were expecting that he would go by the agreement that we had but unfortunately on his part, he could not fulfill his part of the bargain. As we speak, he has been able to pay close to about 37 million cedis and because of his inability to pay the rest, per the agreement that we had, the court had the right to sentence him to a prison term and the court just did that. I am yet to get the full complement of the orders of the court, now that he has been imprisoned if he gets the money to pay that is another ballgame to look at because after a court has given its ruling or judgment the court becomes functus officio, so my expectation is that when he pays then he goes into mitigation when he wants to appeal the sentence.
“Let’s hope that he gets the money to pay. Let us also add that even if he is going to serve the 15 years Ghanaians have also benefited somehow because at least 37 million cedis has been paid to the state. If he had been sentenced last year, we wouldn’t have even recovered this.
“As we speak, we have other cases in court, Beige bank is in court, we are hearing the matter. UT is also in court, we have other banks, like Duffuor’s bank (Unibank) all in court, and we are doing them one after the other. If the money that we have lost they are ready to refund the money we will look at section 35 and go by that and we can have the same agreement,” he is reported to have said.
The Bank of Ghana revoked the licenses of UT Bank, Unibank, and Beige Bank as part of the financial sector cleanup between 2017 and 2019.
Receiver of collapsed uniBank, Nii Amanor Dodoo, has informed the Accra High Court that the management of the bank deliberately misrepresented the true financial position of uniBank in their reports to the Bank of Ghana (BoG).
The Receiver clarified that the financial reports were prepared by the management team of uniBank collectively, and not by any individual. While Benjamin Ofori, a former Executive Head of the Credit Risk Department of uniBank, did not submit any report directly to the BoG in his personal capacity, he did so as part of the bank’s management team.
The Receiver acknowledged that the financial reports of uniBank, which were submitted to the BoG, went through the bank’s internal processes. He further explained that misreporting involved not only communicating false information but also participating in the falsification of reality.
The misreported matters included fictitious loans, fictitious income generated from those loans, and the amounts illegally transferred out of uniBank by the shareholders. The Receiver affirmed that Benjamin Ofori played a critical role in these activities.
The Receiver also revealed that Mr. Ofori played a key role in opening fictitious accounts and assisted with memos that led to the creation of fictitious loans. From 2016 to 2018, Mr. Ofori held the position of executive head of Credit Risk at uniBank, responsible for assessing credit risks and making loan recommendations.
During the court proceedings, the Receiver referred to a memorandum dated 30th November 2016, which formed the basis for a purported loan of GHS 14 million disbursed to Fuzak Construction. The funds were transferred to a fictitious account instead of the regular account of Fuzak Construction, and later transferred to the shareholders’ account.
The Receiver distinguished between fictitious and irregular loans, explaining that an irregular loan may be one approved by someone beyond their approval limits. However, a loan intentionally obtained using a fictitious account number and presented as if it were a regular transaction cannot be described as irregular.
The Receiver highlighted that Mr. Ofori was expected to ensure accurate facts in the memos he reviewed and confirm the regular account numbers of customers listed.
The Receiver further informed the court that no offer letters were generated for the fictitious loans. The case was adjourned for continuation on 11th, 12th, and 13th July 2023.
The receiver of the bankrupt Unibank Limited, Nii Amanor Dodoo, has revealed that an amount of GH13,100,000 was credited to the account of one Maripoma Limited as part of efforts to siphon cash.
According to him, crediting of the account in the banking software of Unibank was done by one Mr R. Mensah, a teller at the World Trade Centre branch of Unibank.
Nii Dodoo made this known when he was answering questions in a cross-examination by lawyers for Mr Jeffery Amon, a former Relationship Manager of Corporate Banking of Unibank Limited.
The accused persons in the Unibank Limited matter have been charged with fraudulent breach of trust, money laundering, dishonest appropriation, willfully causing financial loss to the Republic and conspiracy to commit crime.
At the time that the license of Unibank Limited was revoked, it was discovered that an amount of GH¢5.7 billion had been dishonestly appropriated by the shareholders with the connivance and assistance of some of the accused persons.
He said a total amount of GH¢56,295,000 was debited from the bank’s interbranch ledger account.
This ledger account, according to the Receiver, was a general ledger account.
Nii Dodoo said various entries were passed into the account particularly those based on petty cash vouchers and pay-in slips that were used to siphon funds out of Unibank.
“Some of the petty cash vouchers used to siphon out the GH¢56,295,000 were signed by Mr Paul Appiah Gyasi, Mr William Coleman and Mr Benjamin Ofori, all officers of the bank,” the Receiver added.
He said the entries were passed by Mr Elijah Benson and other officers of the bank based on vouchers presented to them adding that these funds were siphoned out for the benefit of the shareholders.
The Receiver described the pay-in slips based on which funds were siphoned from Unibank as fictitious because there was no evidence of physical cash receipts of those amounts in the books of Unibank.
He said in most cases, when entries were passed in the banking software application of Unibank, a Senior Officer of the bank had to authorise the transaction passed but in this case, this was not the case.
Meanwhile the trial was adjourned to May 17, 2023 for continuation of cross-examination.
There is a possibility that a number of financial institutions who suffered shutdown during the banking sector-cleanup exercise that occurred between 2017 and 2020 may be able to bounce back.
This is so because 2024 flagbearer for the National Democratic Congress (NDC) John Dramani Mahama has pledged to restore the licences of financial businesses who were run out of business unjustifiably should he win the next poll.
Speaking at the University for Development Studies (UDS) in Tamale today, May 15, 2023 to formally accept his role as flagbearer, the former president said: “We will restore indigenous Ghanaian investments in the finance and banking sector and we will create a tier banking system that will serve various segments of the market.”
“We will give the opportunity to experience banking hands who were laid off needlessly to secure their careers once more and move away from the menial jobs that they were compelled to take.
“As far as practicable, the banking licenses that were unjustly canceled by this government will be restored,” he added.
The banking crisis in Ghana led to the revocation of the licenses of more than 400 financial institutions that were licensed under Act, 2016 (Act 930) by the Bank of Ghana (BoG).
The Bank of Ghana conducted an Asset Quality Review of banks in 2015 and 2016, which identified several indigenous banks facing significant challenges. These challenges included high levels of non-performing loans, undercapitalization, and weak corporate governance.
To address these issues, the Bank of Ghana implemented interventions, resulting in the merger of five banks: BEIGE, Sovereign, Construction, uniBank (owned by former Finance Minister Kwabena Duffuor), and Royal Bank. This merger led to the formation of a new entity known as Consolidated Bank of Ghana.
Also more than twenty financial institutions including UT Bank which was owned by Prince Kofi Amoabeng, had their licenses being revoked and given to a receivership.
Following the recapitalization of the banks and a new capital requirement, the number of banks in the country reduced from thirty-six to twenty-three.
Ghana invested more than twelve billion Ghana cedis for this clean-up exercise in the banking sector.
In March 2021, Parliament received petitions from Prince Kofi Amoabeng and Dr Kwabena Duffuor, owners of the UT Bank and uniBank respectively.
The two asked Parliament to investigate the conduct of the Bank of Ghana and the Ghana Stock Exchange in revoking the licenses of their financial institutions.
On March 23, 2021, the Speaker referred to petitions to a seven-member committee of Parliament to investigate and report to the House. The Bank of Ghana was invited over the matter but declined the invitation to appear before the House.
The BoG explained that its decision was taken according to its statutory powers under the Banks and Specialised Deposit Taking Institutions Act, 2016 (Act 930). It added that the probe “flies in the face of the Constitution.”
With the promise to investigate what happened five years ago, Ghana may see an increase in the number of financial institutions.
According to Mr Mahama, among his many objectives is to “promote robust, local participation in our banking and financial, telecommunication, tourism, mining and agric and manufacturing sectors to grow our economy and create sustainable employment for our youths.”
The state has charged founder of defunct Unibank Limited, Dr. Kwabena Duffuor and five others in the matter of between the Republic vs. Dr Kwabena Duffour and others concerning the insolvency of the bank has been adjourned to April 20223.
According to a court transcript following sittings held from March 14 to 16, 2023, Dr Duffuor and the five others were charged for willfully causing financial loss to the Republic and conspiracy to commit crime. Other details of the charges include fraudulent breach of trust, money laundering and dishonest appropriation.
The charges come after the 1st Prosecution witness (Nii Amanor Dodoo) who is the Receiver of Unibank, concluded his evidence-in-chief while Counsel for the 1st, 2nd, 3rd, 4th and 5th accused persons also concluded their cross-examination of the Receiver.
The Receiver discovered that at the time the license of Unibank was revoked, an amount of GH¢5.7 billion had been dishonestly appropriated by the shareholders with the connivance and assistance of some of the accused persons.
At the last court date, Counsel for Elsie Dansoa Kyere, (6th accused), the Executive Head of Corporate Banking of Unibank at the time of the revocation of its license also concluded his cross-examination of the Receiver.,
The Receiver informed the Court that fictitious loans were originated by the 6th accused person and one Benjamin Ofori, a former Executive Head of Credit Risk of Unibank (the 8 th accused).
This was done through memoranda that were channeled through Jeffrey Amon, a former senior Relationship Manager of Corporate Banking (7th accused) for approval from 4th accused (Kwabena Duffour II) and 5th accused (Ekow Nyarko Dadzie-Dennis).
The Receiver stated that these loans in question were neither channeled through the Management Credit Committee, Executive Committee nor the Assets and Liabilities Committee. These loans, according to the Receiver, were fictitious because they were made in the names of persons who did not request that those accounts to be opened.
Nii Amanor Dodoo explained that once when loans are approved, the proceeds go to the customer adding that proceeds of these fictitious loans were rather credited to the Deferred Expenditure Account.
He told the Court that the accounts of the customers listed in the memoranda were all fictitious since they were not the regular account numbers of those customers.
The memoranda also requested for credit facilities to be disbursed into these fictitious accounts, according to the Receiver. The Receiver further explained that the management of the bank in the review of their monthly management accounts were able to determine the actual profit or loss made. This was then compared to the profit indicated in their prepared budget.
On this basis, they then determined how much loans should be generated to create interest. These loans were backdated so the bank’s system would generate and post the interest generated into the interest income account.
The Receiver informed the Court that the shareholders of Unibank siphoned funds from the bank which was charged against the Deferred Expenditure Account.
Since this account did not yield interest, they had to find a way of creating loan accounts that would generate interest.
According to the Receiver, these fictitious accounts were created to generate interest income and to present a situation as though Unibank was operating profitably.
The Receiver added that the fictitious loans were also created to conceal money siphoned from the bank by shareholders. He added that the 6th accused played a significant role in this through the initiation of memoranda together with 7th and 8th accused persons. They did this with the approval of the 4th and 5th accused persons. By this, they significantly misstated the financial statements of Unibank.
The Receiver explained there were meetings during which the plan to create the fictitious loans and generate fictitious interest income was hatched.
At these meetings, the customers in whose names the fictitious loans were to be created were identified and the interest rates to be applied agreed on.
He added that the tabulation of the financial gap that needed to be filled was prepared and based on this, the quantum of loans that needed to be created were determined and signed off on. This formed the basis on which entries were subsequently passed.
The Receiver informed the Court further that his team was informed by officials of the Finance Department of Unibank that this whole plan was arranged by the 4th, 5th, 6th, 7th and 8th accused persons.
He explained that because of the sensitive nature of these transactions, the originating documents were retrieved from the Finance Department after the entries were passed.
He added that an official of the Finance Department who believed that the entries which were being passed would create problems someday hid one of those documents which he shared with the Receiver’s team.
The Court was informed that the financial statements of Unibank did not show the actual position of the Deferred Expenditure Account. He added that his team was informed that the balances on this account were intentionally excluded from the financial statements and the returns submitted to the Bank of Ghana.
The 4th,5th,6th,7th and 8th accused persons concealed the balances on the Deferred Expenditure Account by creating the fictitious loans.
According to the Receiver, the deliberate attempts to conceal the magnitude of those transactions and failure to report the balances on the financial statements and actually transferring some of these funds to the fictitious accounts was wrong.
The Receiver further informed the Court that the shareholders of Unibank accepted responsibility for the funds siphoned from the bank. He indicated that the shareholders initially offered to hand over assets purchased with those funds.
They later proposed to set up a special purpose vehicle to house those assets and to use the special purpose vehicle to secure loans to reimburse the bank.
The shareholders, according to the Receiver, offered to seek loans directly to pay back the siphoned funds. All these proposals, the Court was informed, were yet to materialize.
Meanwhile, the case was adjourned to April 18 and 19 2023.
The Accra High court has struck out all charges against Dr Kwabena Duffuor and eight others standing trial for the collapse of unibank.
The founder of the now-defunct uniBank, Dr. Kwabena Duffuor, was facing 68 counts on charges of fraudulent breach of trust, money laundering, dishonestly receiving and falsification of accounts.
But at the commercial division of the High Court, the prosecution led by Yvonne Atakorah, prayed for the old charges filed in March to be dropped.
The prosecution pleaded that they are amending some portions of the charge sheet with a new one to be filed on June 17, 2020.
Having listened to their plea, the court of appeal judge, Justice Philip Bright Mensah, withdrew the old charges.
Striking it out, the judge said, “all the accused persons are discharged of the old charges but their plea will be taken for the new charges.â€
The court is currently hearing the new charges.
Background
Dr Kwabena Duffuor, Dr Johnson Pandit Asiama and six others have been charged with 68 counts for the collapse of uniBank and UT bank.
The A-G accused Dr Duffuor, who was a shareholder of uniBank, of contributing to the collapse of the bank.
Dr Duffuor was said to have dishonestly received GH₵663.28 million from the bank.
It is also the case of the A-G that even though uniBank was in financial distress, Dr Asiama allegedly used his position as the Second Deputy Governor of the BoG to approve the transfer of GH¢300 million, which was an unsecured credit facility from uniBank to the Universal Merchant Bank (UMB).
Dr Asiama has been charged with willfully causing financial loss to the state and contravention of the Bank of Ghana Act, 2002 (Act 612).
The other accused persons in the collapse of uniBank are Dr Kwabena Duffuor II, a son of Dr Duffuor, who was the Chief Executive Officer (CEO) of uniBank; Ekow Nyarko Dadzie-Dennis, the Chief Operating Officer of the bank; Elsie Dansoa Kyereh, the Executive Head of Corporate Banking; Jeffery Amon, a Senior Relationship Manager; Kwadwo Opoku Okoh, the Financial Control Manager, and Benjamin Ofori, the Executive Head of Credit Risk at the bank.
They have been charged with various counts of fraudulent breach of trust, money laundering and conspiracy to commit crime.
All the accused persons have pleaded not guilty to the charges.
