15
Wed, Aug

CEOs OF COLLAPSED BANKS IN 'DODGY SCAMS'

Business & Economy

Renowned top notch accounting firm KPMG may be faced with serious issues of credibility, unless it comes clean, in the estimation of financial analysts, on the blanket clean bills of heath it had given some banks that had gone down in an avalanche of sneaky operations recently, for profusely recommending them for fabulous awards, when their chief executive officers and management were clearly fleecing the public, customers and government through ‘419 scams’ unheard of in the history of Ghana.

Renowned top notch accounting firm KPMG may be faced with serious issues of credibility, unless it comes clean, in the estimation of financial analysts, on the blanket clean bills of heath it had given some banks that had gone down in an avalanche of sneaky operations recently, for profusely recommending them for fabulous awards, when their chief executive officers and management were clearly fleecing the public, customers and government through ‘419 scams’ unheard of in the history of Ghana.

 

Also caught in the web is a brother of John Mahama, Ibrahim Mahama, whose name has popped up in some of the deals that contributed to the collapse of some of the banks.

                                                  PK Amoabeng/UT Bank

In UT Bank for instance, two payments were made to the former CEO and a director, P K Amoabeng, from a loan defaulting entity, Kofi Jobs Limited. The loans amounting to GHC5 million were never disclosed to the board of the bank. There was also a significant amount of inter-group lending which involved other subsidiaries of the holding company, UT Holdings. The sums involved included loans of GHS71.6m and US$14.3m.

Also included in the obvious financial wrongdoings were connected party loans made to Ibrahim Mahama’s related companies, amounting to GHS261.4m and US$6.4m; Quincy Sintim’s related companies, amounting to GHS84.1m; and Beige Group’s related companies, amounting to GHS10.9m.

Available information shows that the former CEO breached the single obligor limits for Ibrahim Mahama’s connected companies: Holman Brothers, Kofi Jobs, Dzata Cement, MBG Limited and Engineers & Planners Limited.

Even though the bank had sought a waiver of the Ibrahim Mahama related companies’ single obligor violations, it undertook a pass through US$6.4m transaction by giving Beige Capital Savings and Loans a US$5m placement as guarantee to extend a US$5m loan to Holman Brothers.

Again, several deposit investments were placed with UT Holdings Limited and not recorded as liabilities and assets on the UT Bank’s books.

The minutes of the 1st ordinary meeting of the Board of Directors’ for the UT Bank in 2016 states: “Payments of up to GHS6.9m for matured Fixed Deposits were made to customers who claimed to have had investments with the Bank. Even though these deposits could not be traced in the system, payments were made following internal audit investigations. There is an urgent need to address this growing account balance”.

                                                  Banking awards a farce

Meanwhile, the recent collapse of uniBank and Royal Bank appears to have dealt a serious credibility blow to the popular banking awards, refereed by KPMG.

The two banks whose licenses were withdrawn by the Bank of Ghana swept the major awards at the 2017 ceremony.

The two banks had gained fame for their efforts at creating a customer-friendly ambience but recent events have revealed backroom dealings that were everything but in the interest of their customers.

According to the Bank of Ghana, directors of the two banks were lending customer funds to themselves under extremely worrisome circumstances.

For instance, uniBank had given out amounts totalling GHC1.6billion to shareholders and related parties in the form of loans and advances without due process and in breach of relevant provisions of Act 930.

In addition, these shareholders and related parties had also been given amounts totaling GHC3.7billion which were neither granted through the normal credit delivery process nor reported as part of the bank's portfolio.

In the case of Royal Bank, an on-site examination conducted by the central bank revealed that non-performing loans constituted 78.9 percent of total loans granted, owing to poor credit risk and liquidity risk management controls among others.




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