Bank of Ghana to prosecute executives of failed banks


Ghana’s central bank plans to prosecute executives of failed local lenders suspected of dissipating depositors’ funds and insider dealing.

Deputy central bank governor Elsie Awadzi said in Accra that the central bank was also considering barring culpable directors from operating in the Ghanaian financial sector.

“We are working very hard on submitting a dossier on each of these banks to the law enforcement agencies … to further investigate criminal behaviour or what could potentially be criminal behaviour and to prosecute,”  Awadzi said in an interview in Accra, without naming any of the individuals under investigation.

The Bank of Ghana on August 1 said it had revoked the licenses of Unibank and smaller peers Royal Bank, Beige Bank, Sovereign Bank and Construction Bank, and had appointed a receiver to manage their assets because they had become insolvent.

The regulator has merged the assets of the collapsed banks into a new state-owned lender, Consolidated Bank Ghana, to protect depositors’ money and avoid a financial sector crisis.

Awadzi said the regulator’s primary commitment was to protect depositors’ funds and ensure a smooth transition to the new bank.

“That has gone well so far and we are going to ensure that integrity is returned to the financial sector by ensuring that persons whose conduct contributed to the banks’ failure will not be shielded,”  she added.

In a report on Unibank, the biggest of the failed lenders and which ranked as the country’s sixth-largest lender by assets before its collapse, the central bank cited shareholders and other affiliates as taking for themselves a total of 5.3 billion Cedis ($1.1 bln).

The apex bank said the money represented 75 per cent of its total assets.

It said the 3.7 billion cedis of the funds taken by shareholders were neither granted through the normal credit delivery processes nor reported in the bank’s loan books.

Unibank founder Kwabena Duffuor rejected the charges:
“We believe the figures the central bank is putting out are not right

“What they are saying is not true. Besides, we have not seen a copy of the report that was supposedly produced on our bank because they are reluctant to give (it to) us,”  Duffuor said.

He said Unibank had written to the central bank to complain that what it had done was wrong.

Awadzi said the five banks – all of which had declined comment when their licenses were revoked on August 1 – had a cumulative deficit of 5.76 billion Cedis. She said that the government had issued bonds to enable the new entity Consolidated Bank to finance inherited liabilities.

In addition, the government had capitalised Consolidated Bank with 450 million cedis.

Awadzi said the central bank had authorized the receiver to follow and retrieve assets taken by managers of the defunct banks.

Ghana is in its final year of a $918 million deal with the International Monetary Fund to restore fiscal stability, reduce public debt and improve financial sector integrity.

Amaka E. Nliam