Persons involved in banks collapse will be prosecuted – Dep AG assures
The office of the Attorney General has assured that it will prosecute persons involved in the collapse of banks that resulted in a clean-up beginning in 2017.
He indicated that all persons whose action and inaction led to the collapse of the various banks during the financial sector reforms undertaken by the central bank would face the full rigours of the law.
“In cases like this, you need to have time to do a thorough investigation. We are talking about figures; it is not something that you can conjure. You need experts to go through the books…so that when it comes to court, we don’t have problems with how we arrived at figure A or figure B. It is about a thorough investigation,” he stressed.
The Deputy Attorney General also mentioned that the state had lost substantial money in the banking sector clean-up and thus the need to prosecute offenders.
“The depositors needed to be paid, the government had to pay, and we are now in court to prosecute and, if possible, recover. If you paid an amount of GH¢1.2bn from the taxpayers’ money, we need that money back. We can get it back only when you take legal action like we have today.
“I can assure you that there are other cases that will also, very soon, come to court. We have done a lot of investigations to recover those sums of money. Let me sound this warning to those involved in Savings and Loans, Micro Finance and other banking institutions, if you were involved and the state has to cough money to pay, you will be called upon to answer the charges. We are very much ready,” he added.
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 down 53 fund management companies.
The BoG, on August 14, 2017, began revocation of the licences and approved that GCB Bank takes over the good assets of Capital Bank and UT 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 licenses of five other banks – Unibank, Construction Bank, The Royal Bank, Beige Bank, and Sovereign Bank – and announced that their good assets had been merged to form Consolidated Bank Ghana.
The affected banks included Heritage Bank Limited (HBL), Premium Bank and GN Bank.
However, the central bank’s decision is being contested by some of the shareholders of some banks that lost their licenses.
Notable among them are the shareholders of Unibank, which took on the BoG claiming their license 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.