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Information available to the Daily Statesman indicates that the Economic and Organised Crime Office (EOCO) has commenced investigations into the alleged illegal acts perpetrated by the chief executive officers, directors and other key officials of the five collapsed banks.

Information available to the Daily Statesman indicates that the Economic and Organised Crime Office (EOCO) has commenced investigations into the alleged illegal acts perpetrated by the chief executive officers, directors and other key officials of the five collapsed banks.


The five banks that have since been merged by the Bank of Ghana to form the Consolidated Bank Ghana Limited are Sovereign Bank, Beige Bank, uniBank, Construction Bank and Royal Bank.

A source at EOCO yesterday confirmed to the Daily Statesman that the central bank had furnished it with a report detailing the infractions allegedly perpetrated by officials of the affected banks.

Osei Gyasi, Head of Banking Supervision at the Bank of Ghana, had said in a radio interview that the relevant information, including names of some individuals responsible for the collapse of the five banks, had been submitted to EOCO.

“If you are aware that EOCO has invited some people, certainly that couldn’t have been done without a report,” Mr Gyasi said on Accra-based Joy FM.

“If it comes out that somebody compromised [the system], the appropriate sanctions will be applied. We have done the report and the period in which these things occurred are clearly defined. These things occurred under the administration of some people and once the people have been identified and they are found culpable by the law, the appropriate sanctions will be applied,” he added.


According to the central bank, its investigations had shown that officials of the five collapsed banks obtained their banking licenses illegally, through the use of suspicious and non-existent capital.

Directors of some of the banks were also allegedly lending customer funds to themselves under extremely worrisome circumstances.


For instance, uniBank had given out amounts totalling GHC1.6 billion 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.

                                                                  Royal Bank

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.

According to BoG, the suffered severe capital impairment due to under-provisioning for loans, over-estimation of investments with other financial institutions, and overstatement of capital on account of fixed assets. These were rejected by the central bank for capital purposes, leading to an adjusted capital of negative GH¢484 million.

This yielded a “CAR of negative 80.53 percent, a capital deficiency of GH¢567.78 million and a net-worth of negative GH¢498.63 million as at 31st May, 2018,” said a statement from BoG.

                                                                  Beige Bank

The Beige Bank Limited commenced banking operations in December 2017 after operating as a savings and loans company.

But after six months of operations, a special examination conducted by the central bank revealed that funds purportedly used by the bank’s parent company to recapitalise were sourced from the bank through an affiliate company. This was in violation of regulatory requirements for bank capital.

“In particular, an amount of GH¢163.47 million belonging to the bank was placed with one of its affiliate companies (an asset management company) and subsequently transferred to its parent company which in turn purported to reinvest it in the bank as part of the bank’s capital,” BoG said in its statement.

Beige Bank was also said to have persistently breached the cash reserve requirement (CRR) of 10% (CRR at 23 July, 2018 was 1.97%) since the beginning of January 2018.

                                                               Sovereign bank

Subsequent to its licensing, a substantial amount of the bank’s capital was placed with another financial institution as an investment for the bank.

BoG investigations into what resulted in last year’s closure of Capital Bank showed that Sovereign Bank’s initial capital contributed by its shareholders was funded from transfers from Capital Bank which had been presented to the central bank as investments on behalf of the bank.

 “The bank has however not been able to retrieve this amount from the investment firm with which it was placed, and it has emerged that the investments were liquidated by the shareholders and parties related to them. Following enquiries by the Bank of Ghana, the promoters of the bank admitted that they did not pay for the shares they acquired in the bank,” BoG added in its statement.

The statement added: “The bank is unable to meet daily obligations as they fall due. Liquidity support granted so far to the bank amounts to GH¢12 million as of May 2018. The bank has not been able to publish its audited accounts for end-December, 2017 breaching section 90 (2) of Act 930.”

                                                            Construction Bank

With this bank, the central bank’s investigations revealed that the initial minimum paid-up capital provided by its promoter/shareholder was funded by loans obtained from NIB Bank Limited (GH¢34 million) and uniBank (Ghana) Limited (GH¢61.00 million), contrary to section 9 (d) of Act 930.

An amount of GH¢80 million out of the amounts reported as the bank’s paid-up capital and purportedly placed with NIB and uniBank remains inaccessible to the bank;

Owing to the bank’s inability to access investments purportedly made in its name with other financial institutions, the central bank concluded that a total of GH¢80 million of the bank’s GH¢120 million initial paid-up capital is unavailable to the bank for its operations, leaving an amount of GH¢ 40 million (one-third of the minimum capital of GH¢ 120 million).

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