Capital Bank case: I’m a nation builder – Ato Essien

The founder of the defunct Capital Bank, William Ato Essien, has described himself as an economic growth catalyst of Ghana after appearing in court on Thursday, 4 October 2021.

He was hurled before the Accra High Court to answer charges in relation to the collapse of the bank after a clean-up of financial institutions by the Bank of Ghana (BoG) which started in 2017.

After several months in court, he opened his defence with a long introduction of himself to the amusement of the court.

Responding to a question by his lawyer on what he did for a living.

He replied: “I’m the talk of the drive of the Finance Minister. A true entrepreneur who creates out of nothing, businessman, capacity to assume risk in other jurisdictions. What I do is called a risk taker and in other common references, they refer to what I do as the engine of growth for economies. And so my Lord, I could have easily said an entrepreneur, but what I do is bigger than that. I am a nation builder”.

Background

On August 14, 2017, the licences of Capital Bank and UT Bank were revoked by the BoG after being declared insolvent.

The BoG allowed the state-owned bank, the GCB Bank, to acquire the two banks to protect depositors’ funds and enable them to stay afloat.

The hurricane that swept through the banking sector due to the collapse of the two banks heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity — Consolidated Bank, Ghana.

Charges

The accused have been slapped with stealing contrary to section 23 (1) and 124 (1) of the Criminal Offences Act, 1960 (Act 29), Money Laundering contrary to section 1 (1) (a) of the Anti-Money Laundering Act, 2008 (Act 749) and conspiracy to stealing contrary to section 23 (1) and 124 (1) of the Criminal Offences Act, 1960 (Act 29).

In all, the founder of the defunct bank William Ato Essien is charged with eight counts of stealing, eight counts of money laundering and three counts of conspiracy to stealing, making it a total of 19 counts.

The Managing Director of MC Management Services, Tetteh Nettey, faces two counts of stealing, two counts of money laundering and two counts of conspiracy to steal, making his a total of 6 counts.

On the other hand, the Managing Director of the bank Fitzgerald Odonkor, is charged with seven counts of abetment of crime, namely stealing.

The state estimates that the accused persons have misappropriated GHC 262,500,000.00.

What are the facts?

According to the fact sheet presented in court, the first accused person, William Ato Essien, was the majority shareholder of Capital Bank Ltd (Capital Bank), a wholly-owned Ghanaian bank that previously operated as a microfinance company.

The second accused person, Tetteh Nettey, was the managing director of MC Management Services, a company established by the first accused person purposely for the promotion of the incorporation of Sovereign Bank, another brainchild of the first accused person.

The third accused person, Fitzgerald Odonkor, was the managing director of Capital Bank from June 2015 to August 2017 and the fourth accused person, Kate Quartey-Papafio, is a businesswoman and chief executive officer of Reroy Cables Company Ltd.

Between June 2015 and November 2016, pursuant to an application by Capital Bank, the Bank of Ghana (BoG) provided a total sum of GHC620 million as liquidity support to Capital Bank to enable it [to] meet its capital adequacy ratio and to enable it [to] service its maturing debt obligations.

In October 2015, the first accused person, aided by the third accused person, caused a transfer of a sum of GHC120 million of the liquidity support amount to All Time Capital Ltd (All Time), an investment management and advisory firm. At the instance of the first, second and third accused persons, GHC100 million of the GHC120 million which had been transferred to All Time was further transferred to MC Management Services while GHC20 million of the amount of GHC120 million was transferred to Pronto Construction and Supplies Ltd (Pronto Construction).

The sum of GHC100 million which was transferred to MC Management Services was subsequently represented by the second accused person to BoG as initial capital of Sovereign Bank while the GHC20 million that was transferred to Pronto Construction was used by the managing director of Pronto Construction, ostensibly to purchase shares in Capital Bank.

Again, at the instance of the first and third accused persons, GHC65 million out of the BoG liquidity support of GHC620 million was transferred to Nordea Capital Ltd, described as an investment bank. Of the amount of GHC65 million, the first accused person, aided by the third accused person, caused GHC30 million to be transferred to MC Management Services which was represented to BoG as additional initial capital of Sovereign Bank by the second accused person.

With the aid of the third accused person, the remaining GHC35 million of the GHC65 million was paid into a Fidelity Bank account of Brietling Services, a company also established by the first accused person. At the request of the first accused person, the amount of GHC35 million which was transferred into the account of Brietling Services was subsequently transferred to Capital Africa Group, a company owned by the first accused person.

The total amount of GHC130 million which was represented as initial capital of Sovereign Bank was eventually channelled by the first and second accused persons into Capital Africa Group, the first accused person’s company, less bank charges. The monies transferred into Capital Africa Group were eventually dissipated by the first and second accused persons.

Between June 2015 and October 2016, the first accused person, with the support of the third accused person, appropriated a total of GHC27.5 million of the liquidity support, which was conveyed in jute bags to the first accused person and purportedly used as payment for business promotion.

In June 2017, in furtherance of the conversion of portions of the GHC620 million liquidity support, the first accused person caused a sum of GHC100 million to be paid into a Capital Bank account held by the managing director of the following three companies – Maripoma Enterprise Ltd, Hardwick Ltd and Volta Impex Enterprise Ltd – opened purposely to receive the amount.

The GHC100 million was to be used by the managing director of the three companies, ostensibly as payment for 30% shares in Capital Bank. As a cover-up of the conversion, the first accused person prevailed on the managing director of the companies to submit copies of government payment certificates of the three companies valued at GHC135 million to be discounted to GHC105 million by Capital Bank, to be used as collateral for the purported loan of GHC100 million.

The first accused person then caused GHC70 million out of the GHC100 million that had been previously paid into the managing director’s account at Capital Bank to be transferred to the fourth accused person’s account with Cal Bank Ltd.

The first and fourth accused persons subsequently caused the amount of GHC70 million in the Cal Bank account of the fourth accused person to be further transferred into a personal account of the fourth accused person purposely opened at Capital Bank to receive the amount.

The fact sheet adds that sometime in 2017 after Capital Bank had gone into receivership, the fourth accused person, even though fully aware that Capital Bank had gone into liquidation, attempted to withdraw the whole amount of GHC70 million which had been lodged in her personal account with Capital Bank but was however prevented from doing so by the receiver.

Defence lawyers said after the state closed its case that they desired to make a submission of no case in response to the charges levelled against their clients.