Parliament to set up committee to probe uniBank and UT bank licence revocation

Parliament intends to set up a seven-member committee to probe circumstances that led to the collapse of UT and uniBank, companies affected by the financial sector clean-up in 2017.

The need for a further probe comes after Dr Kwabena Duffuor and Prince Kofi Amoabeng petitioned the Speaker of Parliament Alban Bagbin.

Bawku Central MP, Mahama Ayariga, officially presented the petition on Wednesday.

Shortly after the Minister for Parliamentary Affairs Osei-Kyei-Mensah rose to challenge the request.

He pointed out that the case was still in court.

After hot exchanges, the Speaker overruled in favour of Mahama Ayariga, indicating that the committee’s work will not affect the pending court case.

The house is yet to select members of the committee but the leadership of the Majority and Minority have up to Wednesday, March 31, to present the names.

What is Mr Duffuor seeking?

He is requesting that Parliament:

-Investigates the conduct of the Bank of Ghana in the takeover, the appointment of an Official Administrator of uniBank Ghana Limited, and the circumstances of the revocation of the banking licence of uniBank Ghana Limited;

-Directs the restoration of the banking licence of uniBank Ghana Limited by the Bank of Ghana and the remedying of the harms done to the shareholders’ property rights as a result of the conduct of the Bank of Ghana.

-Gives any other directives that Parliament may deem appropriate.

What is Mr Amoabeng seeking?

Mr Amoabeng, is also seeking that the legislature:

-Investigates the conduct of the Bank of Ghana and the Ghana Stock Exchange for the revocation of UT Bank’s licence and delisting the bank without due regard to the rules of Administrative Justice guaranteed under article 23 of the 1992 Constitution.

-Directs the restoration of the banking licence of UT Bank Limited by the Bank of Ghana and the remedying of the harms done to the shareholders’ property rights as a result of the conduct of the Bank of Ghana.

-Gives any other directives that Parliament may deem appropriate.

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Background

BoG announced reforms and a financial sector clean-up in 2017 following a decision to revise the minimum capital requirement from GHC120million to GHC400million.

Some nine local banks, 23 savings & loans companies, 347 microfinance institutions and 39 finance houses had their licences revoked.

After the action of the BoG, the Securities and Exchange Commission (SEC) also stepped in to shut 53 fund management companies.

The central bank on August 14, 2017, began revocation of the licences and approved that the good assets of Capital Bank and UT bank be taken over by GCB Bank while it appointed Vish Ashiagbor of PwC as receiver to make the most out of the remaining assets.

A year later, the apex bank revoked the licences of five other banks – Unibank, Construction Bank, The Royal Bank, Beige Bank, and Sovereign Bank – and announced that their good assets have been merged to form Consolidated Bank Ghana.

The affected banks included Heritage Bank Limited (HBL), Premium Bank and GN Bank.

The central bank’s decision, however, is being contested by some of the shareholders of some banks that lost their license.

Notable among them are the shareholders of uniBank which took on the BoG claiming their licence revocation was done arbitrarily without recourse to them.

Finance Minister-designate Ken Ofori-Atta has said the banking sector clean-up exercise cost the Ghanaian taxpayer total of GH¢21 billion, which he has described as a “financial enslavement legacy” from the erstwhile Mahama administration.

The Ministry of Finance is proposing a tax of 5 percent on gross profit from the banks to defray the debt.

It is subject to review after four years.

The latest on the UniBank court case

Dr Kwabena Duffuor, Dr Johnson Pandit Asiama and six others have been charged with 71 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, on the other hand, 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 a crime.

All the accused persons have pleaded not guilty to the charges. The trial is set to continue on July 16, 2021.

The latest on UT bank court case

On May 28, 2020, an Accra High Court ordered the state to file, by June 22, all the documents they intend to rely on in the matter of Prince Kofi Amoabeng and five others, whose alleged roles led to the collapse of the Bank.

The five are Johnson Pandit Asiama, former Second Deputy Governor of Bank of Ghana (BoG), who is the first accused, Raymond Amantu, Head of Banking Supervision Department (BSD) at BOG, UT Holdings Limited, which had shares in UT Bank Ghana, Catherine Johnson, Head of Treasury and Robert Kwesi Armah, General Manager of Corporate Banking, UT Bank.

The accused are facing 42 charges — willfully causing financial loss, abetment of crime, Contravention of the Bank of Ghana Act, fraudulently causing financial loss to the Republic, Fraudulent Breach of Trust, Deceit of a public officer and fabrication of evidence.

They have, however, pleaded not guilty to the charges and have been granted bail with various terms of condition.