UT Bank collapse affecting my other businesses – Kofi Amoabeng

The collapse of UT Bank in 2017 has resulted in severe business challenges for other companies under the UT group, the group CEO Prince Kofi Amoabeng has revealed.

According to him, the UT brand has lost its past glory as the collapse of the UT Bank has “defamed” the UT brand.

Kofi Amoabeng said in a statement that the situation among other things has resulted in difficulties in servicing payments due its investors.
“The actions so far taken by the central bank have adversely affected the operations of the remaining group of companies of UT. The UT brand which was previously a superbrand a few years ago has been totally defamed. The situation has, for instance, led to difficulties in the servicing of payments due investors,” he noted in his statement.

He expressed regret that the collapse of the bank had left many of the bank’s staff with nothing to show for their years of dedication to the company.

More importantly to me today though, is the inability of several workers who once prided themselves as UT staff and now have little or nothing to show for their years of dedication and service; the negative impact on the other UT companies in the eyes of investors who believed in us and our vision to see a Ghanaian owned company become a successful global brand, he said.

The UT Holdings group has businesses including UT Properties Ltd, UT Financial Services Ltd. (Nigeria), UT Private Security Ltd., UT Logistics Ltd., and UT Collections Ltd., and Gateway Wealth Management Ltd.

UT Bank, as well as Capital Bank, were collapsed and handed over to state-owned GBC Bank in August 2017 because they had become highly insolvent despite receiving liquidity support from the Bank of Ghana totally over GH¢1.4 billion.

Among the challenges of UT Bank, according to a BoG commissioned report, the Bank had given loans to many of its related parties without due processes and given several other bad loans to external companies.

The report also cited poor governance structure; thus fewer than expected number of directors and a majority of directors who were not independent as expected.

The CEO of the bank, Prince Kofi Amoabeng was also accused of failing to disclose a GH¢5 million loan payment money he had received from one of the bank’s client to the board.

GHS5 million undisclosed fund was personal money

But Kofi Amoabeng denied the claim his statement said the money he received was not the payment for a loan but proceeds of the sale of his personal house at Roman Ridge in Accra to one of the bank’s clients.

“Kofi Jobs Gyebi was a client of UT Bank who secured a loan facility and subsequently paid off the loan with its accrued interest in full.

Mr. Gyebi, after paying off in full his commitment to the Bank, expressed interest in purchasing my personal residence at Roman Ridge in Accra, which I had put up for sale.

Due to UT Bank’s challenges at the time, I instructed that payment of the said house be made to my personal bank account at UT Bank to help shore up the company’s liquidity. I wonder then, how, my decision not to disclose payment of monies into my personal account for the purchase of my personal residence constitutes a misdeed as suggested by several news reports,” Kofi Amoabeng explained, he said.

 While expressing disappointment that the bank whose vision was to support Ghanaian businesses and become a global Ghanaian business had to collapse after 20 years of operation.

“Our brand was guided by a vision of assisting Ghanaian businesses and individuals to achieve their aims, based on sound values, principles, and discipline. We had always envisioned growing this company into a steadfast, international, Ghanaian-owned company. However, in our quest to support Ghanaian businesses and individuals, the company had challenges, and the central bank intervened.

He, however, indicated that he will continue to “co-operate with all state agencies probing the development for finality to be brought to this matter.”

Source:Citinews

UT Collapse: I didn’t ‘divert’ $5m – Amoabeng

The former CEO of defunct UT Bank Prince Kofi Amoabeng has denied media reports that he took $5 million loan without informing the bank’s board.

In a statement released Thursday night the first since the bank he retired from collapsed in 2017, explained the amount was money he made from selling his personal property at Roman Ridge in Accra and does not belong to the defunct bank.

“It is instructive to note that the Boulders report, which was the source document of the said news report indeed referenced my response to the team that interviewed me on the same matter. On page 46 of the said report, it states, “When Boulders Advisors Limited enquired about this transaction, Mr P.K. Amoabeng indicated he had sold his personal residence at Roman Ridge, Accra to Mr Kofi Jobs Gyebi.”

“It is therefore curious that this was neither factored into the conclusion of the Boulders report nor any of the widespread media reportage,” Mr. Amoabeng said in a statement.

Below are details of the statement:

STATEMENT ON LATEST DEVELOPMENTS CONCERNING COLLAPSE OF UT BANK

The last one year has been a very challenging period for the UT family.

Personally, I have been deeply disturbed by events that preceded the collapse of UT bank and more so, some of the happenings that have unfolded after the takeover by the Bank of Ghana.

In truth, my heart bleeds as I struggle to come to terms with the fact that the organization we toiled so hard to build over 20 years ceases to exist.

A lot has been said over the period in question.

I have refrained from commenting on the developments for a number of reasons including the fact that EOCO continues to investigate the circumstances leading to UT Bank’s collapse.

However, I feel compelled to come out at this time following widespread misrepresentation of the facts of the matter, particularly in relation to my supposed withdrawal of some GHS 5 million, which, according to media reports, I failed to disclose to my board.

Now, here are the facts of the matter.

  • Kofi Jobs Gyebi was a client of UT Bank who secured a loan facility and subsequently paid off the loan with its accrued interest in full.
  • Gyebi, after paying off in full his commitment to the Bank, expressed interest in purchasing my personal residence at Roman Ridge in Accra, which I had put up for sale.
  • Due to UT Bank’s challenges at the time, I instructed that payment of the said house be made to my personal bank account at UT Bank to help shore up the company’s liquidity. I wonder then, how, my decision not to disclose payment of monies into my personal account for the purchase of my personal residence constitutes a misdeed as suggested by several news reports.
  • It is instructive to note that the Boulders report, which was the source document of the said news report indeed referenced my response to the team that interviewed me on the same matter. On page 46 of the said report, it states, “When Boulders Advisors Limited enquired about this transaction, Mr P.K. Amoabeng indicated he had sold his personal residence at Roman Ridge, Accra to Mr Kofi Jobs Gyebi.”

It is therefore curious that this was neither factored into the conclusion of the Boulders report nor any of the widespread media reportage.

  • I’m saddened by the turn of events these past few months. Our brand was guided by a vision of assisting Ghanaian businesses and individuals to achieve their aims, based on sound values, principles, and discipline. We had always envisioned growing this company into a steadfast, international, Ghanaian-owned company. However, in our quest to support Ghanaian businesses and individuals, the company had challenges, and the central bank intervened.
  • The actions so far taken by the central bank have adversely affected the operations of the remaining group of companies of UT. The UT brand which was previously a superbrand a few years ago has been totally defamed. The situation has for instance led to difficulties in the servicing of payments due investors.
  • More importantly to me today though, is the inability of several workers who once prided themselves as UT staff and now have little or nothing to show for their years of dedication and service; the negative impact on the other UT companies in the eyes of investors who believed in us and our vision to see a Ghanaian owned company become a successful global brand.
  • I will continue to co-operate with all state agencies probing the development for finality to be brought to this matter.

God bless us all.

SIGNED

Prince Kofi Amoabeng

Finance Ministry ‘steals’ GH₵226.3m from YEA accounts

Members of the Public Accounts Committee, Tuesday, August 14, 2018, had a shock of their lives when they were hit with the news that the Ministry of Finance in the year 2015 secretly caused the Bank of Ghana to transfer an amount of GH₵ GH₵226, 390, 383.98 from the account of the Youth Employment Agency (YEA) with the knowledge of the agency.

It is not clear what the Finance Ministry used that money for.

According to the 2016 Auditor-General’s report on the public accounts of Ghana, Ministries, Departments and other Agencies (MDAs), an amount of  GH₵56,390,388.98 was withdrawn from the accounts of the YEA without any contractual agreement between the Ministry of Finance and the employment agency.

The move by the Finance Ministry, according to the Auditor-General, was in contravention to Regulation 2 of the FAR, 2004 (LI 1802) which requires all heads of departments to control and manage efficiently all financial resources under their control.

Appearing before the Public Accounts Committee (PAC) of Parliament, the Chief Executive Officer of the YEA, Justin Kodua, further revealed that the amount withdrawn from their coffers by the Finance Ministry far exceeds what was captured by the Auditor-General in his report.

He said the situation is gradually becoming a norm by managers of the country’s resources and must immediately be halted.

“The money was taken from the YEA accounts without recourse to the YEA. It did not only happen once. If you look at appendix 3, on July 6, 2017, we wrote a letter to the Ministry of Finance drawing their attention to it. In the letter, on June 16, 2016, they took an amount of GH₵150million from the YEA account. On September 30, 2015, they took an amount of GH₵56,390,388.98. Then on February 22, 2017, they took an amount of GH₵20million from the YEA account. In total an amount of GH₵226, 390, 383.98 were taken from YEA account. We wrote a letter to the Finance Ministry to seek refunds for those monies and only the GH₵20million which was taken in 2017 were refunded to us. The rest our efforts have not yielded any results”, he narrated.

When asked if the money was “sitting” in the accounts of the YEA without being put into use and why should the Finance Ministry not take over such funds, the Minister for Employment and Labour Relation, Hon. Ignatius Baffour Awuah, who also appeared before the PAC, provided some answers.

“I will advise that we situate it within the timeframe with which the situation happened. We recall the history of the YEA – After the demise of GYEEDA, a new law had to be passed. When the law took effect, deductions were then made on behalf of the YEA. So, it was like the deductions even preceded the actual set up of the YEA. So, even before the set up, the amount had accumulated and of course, public funds whether it belonged to the MDA or not, it is still public funds. So, at a point in time the government then decided that why don’t we take the money back and use it? So, it wasn’t like the money came and the YEA wasn’t prepared to use it but it happened just at the initial set up of the YEA and that is how that accumulated funds occurred”, he explained.

The YEA is an agency under the Ministry of Employment and Labour Relations.

Let CSOs re-negotiate Ameri deal for you – Energy expert to GoG

An energy expert, Kwadwo Nsafoah Poku, says given the complexity nature of the Ameri deal and looking at how civil society organizations (CSOs) have demonstrated their understanding on the whole arrangement much better the politicians, it would be better if the CSOs are given the opportunity to re-negotiate the deal on behalf of the government.

Of particular importance in his proposal, is the Africa Center for Energy Policy (ACEP) which has been at the center of critiquing the entire agreement since 2015.

“The Government of Ghana (GoG) should give this deal to Civil Society Organizations and think tanks to renegotiate on its behalf and I think that Ghana will get a better deal. Politicians I think – we’ve gotten to understand that they don’t understand the initial deal that ACEP and the rest spoke about. There was a fundamental problem that ACEP had with the deal and they were referring to people to also come against this deal. They want to show you – you sit down with people like ACEP and find out from them what is it that they saw from the initial deal that was bad and what is it that they saw in the present deal that was bad. What could be done? If you get civil society organizations to renegotiate the deal, I think that we will get a better deal than getting politicians to do that,” he noted.

Speaking in an interview with TV 3, Mr. Poku explained that the deal is a complex one which will require those with technical expertise to lead in the re-negotiation exercise on behalf of the GoG.

“The deal is a complex one. Until we had this thermal plant deal, we hadn’t done that before. Most of the plants in Ghana are the ones that the Government has built by itself like the TICOs and the rest. But in terms of the emergency power plants, the emergency program – the Ameri, Aska and Karpower were ones that the nature of the deal, I think it was done in haste in the NDC and people who had problem with it had problem with the way the pricing was made. The per kilowatt per hour that Ghanaians are paying – everybody who spoke against this deal has also spoken against the karpower deal. People who speak against the Ameri deal has a problem with the per kilowatt per hour pricing that we are paying. This per kilowatt per hour is not something that you just come up with by magic. So, I think that the politicians who don’t understand that negotiations should get the people who understand the problem and ask them why the problem and start from scratch and negotiate”, Mr. Poku explained.

He added “Everybody is thinking that the plants are $150 million more expensive. What Ghanaians are paying is 14 cents per kilowatt per hour. Now, in that 14 cents per kilowatt per hour, what are the components that make up the 14 cents per kilowatt per hour? How was that patched up, how was the problem that ACEP had from the beginning? Now, we are all told that after five years, the machine now becomes the property of Ghana but it’s a Build, Own, Operate and Transfer (BOOT) agreement which allows METCA to run that plant though the machine is owned by Ghanaians but METCA will run that plant over a certain number of years. Now, after the 6 years, we are told that we are going to pay 10 cents per kilowatt per hour and not the 14 cents because the machines are now for Ghana. In that 10 cents, you realize that there is still a capital recovery and the question is that if the machine is mine, why am I still doing capital recovery? Who is that money going t? If a machine is yours what you need is your Operations and Maintenance (O & M). In that 10 cent or 11 cents the Minister took to Parliament, only 1.2 cents per kilowatt per hour was for O & M which is the operation and maintenance of those machines. Only 1.2 cents per kilowatt per hour was going towards that. It means that all the others are for other charges and if the machine is ours it should come into play. So, the people need to understand how that per kilowatt per hour thing was patched up. Unless we do that we are negotiating in a vacuum”.

Bank crisis: My concern is with those who lost their jobs – Otabil

General overseer of the International Central Gospel Church and board Chairman of defunct Capital bank, Dr. Mensa Otabil has said that in the midst of the challenges bedevilling the banking sector, his foremost concern is with is for the well-being of those who lost their jobs.

In a statement he [Mensa Otabil] issued on Tuesday morning, he stated that “My foremost concern, as has been the case over the past year, is for the well-being of those who lost their jobs and those who may have been adversely affected in any way as a result of these developments. My heart goes out to them and to their dependents. I continue to pray for God’s guidance and sustenance as they navigate the course of their lives”.

About 1200 people lost their jobs when Capital bank and UT bank collapsed, out the staggering number, about 400 we understand were absorb by the Ghana Commercial Bank.

Some workers are still battling with the stigmatization of working under a company that collapsed whiles others are said to have passed on.

Exactly a year ago today, two indigenous banks, Capital and UT bank were taken over by the Bank of Ghana over liquidity issues.

Pastor Otabil`s role as the board Chairman of the defunct Capital bank meant he superintended over the collapse of the as asserted by many including financial analyst.

Below is the full statement by Dr. Mensa Otabil

  1. I have observed with concern, the ongoing media discussions regarding developments in the Banking Sector and my role either directly or indirectly.
  2. I accepted to be Board Chairman of Capital Bank in a bid to help strengthen a promising Ghanaian enterprise that had potential but also challenges. I was excited about the prospects of a young man from a disadvantaged background who was daring to create opportunities and employment.
  3. My position was a non-executive role. I was therefore not involved in the day-to-day management and operations of the Bank.
  4. In the course of time, some decisions made turned out well while some did not turn out as well as had been anticipated. As far as I can tell, everything was done with the best of intentions and the interest of various stakeholders in mind.
  5. My foremost concern, as has been the case over the past year, is for the well-being of those who lost their jobs and those who may have been adversely affected in any way as a result of these developments. My heart goes out to them and to their dependents. I continue to pray for God’s guidance and sustenance as they navigate the course of their lives.
  6. Since the takeover of the bank exactly a year ago today, various mandated state institutions have been investigating and working to arrive at a comprehensive understanding of what happened, why it happened and who was responsible for what. I have been invited by EOCO and I have submitted myself to their processes and answered all their questions faithfully.
  7. For some time now, many discussion platforms have made varied references to me and to my perceived role. Some have reached out to me for clarifications regarding issues that have been raised.  I have preferred not to respond in the public domain, not as an admission of guilt, but out of respect for the due process and the ongoing investigations.
  8. Notwithstanding some unforeseen outcomes, I remain resolute in my belief in the Ghanaian and African entrepreneurial spirit. I will therefore continue to lend my support and mentorship to inspire others who dare to dream and work towards the promise of Africa’s growth and transformation.
  9. Meanwhile, as a believer in the rule of law, I will continue to cooperate with the mandated institutions of state as they complete their investigations. I am confident that in the process, the national interest and the rights of all parties involved will be protected.

Shalom, peace and life to you.

Signed, Pastor Mensa Otabil. 14th August, 2018.

 

Sahel Sahara ditches GN, Premium deal; merges with Omni Bank

Sahel Sahara Bank and Omni Bank have agreed to consolidate their operations into one entity in a merger deal that could be the first of a few in the banking sector between now and December.

It follows Sahel Sahara Bank’s decision to exit an earlier merger deal with GN and Premium banks into the waiting arms Omni Bank, which specialises in servicing Small and Medium Enterprises (SMEs). 

A merger deal between the Omni Bank, a member of the Jospong Group, and the Sahel Sahara Bank, which is owned by 13 Sahelian countries, has since received the blessing of the Bank of Ghana (BoG), paving the way for a formal announcement later this month.

The consolidation of the two banks is to create a stronger bank that can meet the BoG’s new minimum capital demand of GH¢400 million by December this year.

When successfully consummated, the deal could create a larger bank with almost 1,000 employees on its payroll and 46 branches, servicing customers in seven regions nationwide.

Its total assets could also be in excess of GH¢1.3 billion, while stated capital would be around GH¢213 million – still below the central bank’s new minimum capital of GH¢400 million.

While the Omni Bank’s stated capital was reported at GH¢141.6 million, that of the Sahel Sahara Bank closed the year at GH¢71.6 million.

Why approve?

In an interview, a retired Deputy Governor of the BoG, Mr Emmanuel Asiedu-Mante, said it was surprising that the central bank approved the merger although it would not resolve the recapitalisation hurdle.

“Why will two banks merge and still not meet the minimum capital?” he asked in an interview on August 13.

“If they cannot meet, then they must as well go their separate ways because the idea is to make a stronger bank out of the two. But if you are going to merge and still not meet some key requirements, then there is absolutely no justification for a merger,” he said.

However, another source told the paper in confidence that the two sides had agreed to use a third party investor through preference shares to help increase the capital to the required amount before December this year.

The plan for capital restoration was part of the strategies presented to the BoG, the source said.

Opportunity for leverage

An investment banker, Mr Mahama Iddrisu, told the paper in a separate interview that a successful merger could mean that the Sahel Sahara Bank would lose its name in Ghana.

He added that the bank’s footprints in the 12 other Sahelian countries will, however, give the new entity a stronger platform on which to leverage for growth.

Given that Omni Bank is currently strong on funding to SMEs, Mr Iddrisu, who was part of the team that integrated the erstwhile The Trust Bank (TTB) into Ecobank Ghana, said it represented a good partnership that when properly leveraged, could help propel growth in the new bank.

New name

A merger between the two banks started in July this year but firmed up towards the end of that month, reports say.

Consequently, a presentation on the merger was made to some staff of the Banking Supervision Department in the week ending August 10.

One source said the central bank gave a ‘no objection’ response to the merger presentation.

Although all parties are respecting confidential clauses, the paper further understands that BoG’s approval will be communicated to the management of Omni Bank and Sahel Sahara Bank in writing this week.

This will set in motion the actual process of integrating the operations of the two banks into one, ostensibly to meet the BoG’s new minimum capital demand of GH¢400 million by December this year.

Transaction advisors

The deal is being overseen by Bora Advisory Services, an indigenous financial service advisory firm.

It is understood that a new name for the merged entity is still being discussed.

In spite of their differences in ownership, both the Sahel Sahara and Omni banks are relatively small, with their 2017 financial accounts showing that they have virtually the same balance sheets. This makes them a perfect match in a merger deal.

Fate of GN, Premium banks

Although good news for Omni Bank and Sahel Sahara, the merger deal between the two banks now places the previously anticipated consolidation of the GN, Premium and Sahel Sahara banks in the balance.

When contacted, the Managing Director of GN Bank, Mr Issah Adam, said “talks are still ongoing and I will not want to give any details at this time”.

When pressed further on Sahel Sahara’s exit, Mr Adam said, “I am not aware of that.”

In July, GN Bank alerted its staff that a merger deal among it and the two other banks was almost concluding to allow for the new entity to scale over the central bank’s capital requirement, which had already led to the collapse of five indigenous banks.

Although it was successfully submitted to BoG for review and approval, Sahel Sahara later exited into the waiting arms of Omni Bank.

Omni Bank, previously known as Union Savings and Loans, began full banking operations in November 2016 after receiving a licence from the BoG in July that year.

Last year, the bank halved its 2016 net loss of GH¢28.7 million to GH¢14.7 million.

Sahel Sahara Bank, on the other hand, has been operating in the country since March 2008.

It is part of the BSIC Group, headquartered in Sirte, Libya. The group was created in 1999 by 28 countries under the Community of the Sahel Sahara States, also called CEN-SAD.

Although a majority foreign-owned bank, the agreement establishing the bank grants it indigenous status, including exempting it from paying taxes. —

Source: Graphic Business

Otabil breaks silence: I had “non-executive” role at Capital Bank

Founder of International Central Gospel Church (ICGC) and Board Chairman of the defunct Capital Bank Dr. Mensa Otabil has spoken for the first time a year after the collapse of the financial institution, explaining that he had a “non-executive role”.

In a statement, the renowned preacher who many describe as an epitome of wisdom said decisions made were in the best interest of the bank.

“My position was a non-executive role. I was therefore not involved in the day-to-day management and operations of the Bank”.

He’s been trolled on social media with many calling on him to publicly respond to criticisms that the supervised the mismanagement of the bank, after he indicted in a leaked report compiled by the Bank of Ghana Central for the collapse of Capital Bank.

Pastor Otabil and his management team have been accused of using monies given them by the Bank of Ghana to salvage the then struggling bank to open new businesses which also failed.

Below are details of the statement by Dr. Otabil

1. I have observed with concern, the ongoing media discussions regarding developments in the Banking Sector and my role either directly or indirectly.

2. I accepted to be Board Chairman of Capital Bank in a bid to help strengthen a promising Ghanaian enterprise that had potential but also challenges. I was excited about the prospects of a young man from a disadvantaged background who was daring to create opportunities and employment.

3. My position was a non-executive role. I was therefore not involved in the day-to-day management and operations of the Bank.

4. In the course of time, some decisions made turned out well while some did not turn out as well as had been anticipated. As far as I can tell, everything was done with the best of intentions and the interest of various stakeholders in mind.

5. My foremost concern, as has been the case over the past year, is for the well-being of those who lost their jobs and those who may have been adversely affected in any way as a result of these developments. My heart goes out to them and to their dependents. I continue to pray for God’s guidance and sustenance as they navigate the course of their lives.

6. Since the takeover of the bank exactly a year ago today, various mandated state institutions have been investigating and working to arrive at a comprehensive understanding of what happened, why it happened and who was responsible for what. I have been invited by EOCO and I have submitted myself to their processes and answered all their questions faithfully.

7. For some time now, many discussion platforms have made varied references to me and to my perceived role. Some have reached out to me for clarifications regarding issues that have been raised.  I have preferred not to respond in the public domain, not as an admission of guilt, but out of respect for the due process and the ongoing investigations.

8. Notwithstanding some unforeseen outcomes, I remain resolute in my belief in the Ghanaian and African entrepreneurial spirit. I will therefore continue to lend my support and mentorship to inspire others who dare to dream and work towards the promise of Africa’s growth and transformation.

9. Meanwhile, as a believer in the rule of law, I will continue to cooperate with the mandated institutions of state as they complete their investigations. I am confident that in the process, the national interest and the rights of all parties involved will be protected.

Shalom, peace and life to you.

Signed, Pastor Mensa Otabil. 14th August, 2018.

PAC Chair, Finance Minister clash over GH¢122 bn Ghana’s public debt

Ghana’s debt to GDP ration as at December 31, 2016, Monday, August 13, 2018, became the subject of controversy when the Chairman of the Public Accounts Committee (PAC), Hon. James Klutse Avedzi, confronted a deputy Minister of Finance, Hon. Abena Osei Asare over the country’s true public debt.

The Minister for Finance, Ken Ofori-Atta in his 2017 budget presentation to Parliament puts the country’s total public debt at GH¢122 billion.

However, the Controller and Accountant General in the 2016 Auditor-General’s report for the consolidated fund puts the figure at GH¢120 billion, contradicting what was earlier announced by the Finance Minister.

In his bid to reconcile the figures, the PAC Chair sought clarification from the deputy Finance Minister by pointing out the discrepancy and accused Mr. Ofori-Atta for deceiving Parliament.

But Hon. Osei Asare in refuted the claims saying that Mr. Ofori-Atta used the exchange at that time to arrived at GH¢122billion.

Below are some excerpts from the PAC sitting:

PAC Chair: Domestic debt is GH¢52.179 billion and external is GH¢68.149 billion. The two put together will give you GH¢120.3billion. My question to the deputy minister – your minister came to Parliament to say that government’s total debt to GDP is GH¢122billion as at December 2016, why?

Deputy Finance Minister: Yes our Minister confirmed GH¢122bilion which is about 73.1%. Now there is a difference here of GH¢2 billion.

PAC Chair: The accounts of the Controller and Accountant-General confirmed GH¢120billion and the auditor also verified and confirmed that figure. My question is why did your minister say GH¢122billion when the actual debt is GH¢120billion?

Deputy Finance Minister: You know that a lot of these debts are foreign based or denominated and so these exchange rates differ. My minister reported this in March 2017 based on the current exchange rate at that time.

PAC Chair: I agree that he reported it in March 2017 but the reference point wasn’t in March 2017. The reference point was in December 2016 and there was an exchange rate as at December 2016, why?

Deputy Finance Minister: Hon. Chairman, as far as I know the difference had to do with the exchange rate.

PAC Chair: My dear sister you are not answering my question. I’m saying that reference point is December 2016 not March 2017. Did your minister use the exchange rate as at March 2017 to represent the figure as at December 2016? Is that what he did?

Deputy Finance Minister: Mr. Chairman, this was as at 31 December 2016. My minister’s statement came in March 2017. So, certainly he used the exchange rate …

PAC Chair: I just want you to confirm if your minister used the March 2017 exchange rate to represent 31 December debt and converted it.

Deputy Finance Minister: Hon. Chair, anytime you are quoting your current liabilities, you need to quote it at the current rate. Certainly, Ghana took some loans way back in 1999. We cannot use the exchange rate of 1999 when we are talking about that loan and making some repayment. So, certainly he will use the current exchange rate. And as you also confirmed that most of these debts here were external loan. So certainly if you use the existing exchange rate, the figures might go up or down but that notwithstanding, it remains the same that our debt to GDP ratio was high.

PAC Chair: I agree with you that the the external portion of the debt must be converted into Cedis and exchange rate must be used at a point and the Controller and  Accountant-General used the exchange rate as December 31, 2016. That is how he arrived at GH¢120billion as debt. Now your minister decides to use the current exchange rate at the time which is March 2017 and misrepresented to Parliament that the debt as at December 2016 was so much. The minister could have just done the exact thing by saying that by using the exchange rate as at December 2016, this should have been the debt GH¢120billion but as at the time of presenting the budget in March 2017, if you use the current exchange rate, it will be GH¢122billion and that is the answer he should have given. He didn’t do that.

Deputy Finance Minister: Hon. Chairman, certainly any day anytime when you are stating a loan, you state its current value and that is exactly what my minister did. My minister did not come to misrepresent issues on the floor of Parliament. He was current because when you are stating your debt, it has to be current.

PAC Chair: Alright let’s go on. You’re trying your best but let’s go on.

Deputy Finance Minister: No, I am just stating the fact as it is, Hon. chairman.

Woyome now owes Ghana GH¢46m; CAGD don’t know when he’ll make full payment

The Controller & Accountant General’s Department (CAGD) says it is not certain when businessman and a financier of the opposition National Democratic Congress (NDC), Alfred Agbesi Woyome, will pay back all his debt owed the State.

In the view of the CAGD, even though Mr. Woyome has made some payments totalling GH¢4,667,566.62 out of the GH¢51.2 million he owes the State, they cannot be sure of the specific timeframe with which the remaining GH¢46 million will be paid.

Mr. Eugene Ofosuhene, the Controller & Accountant General, who made this observation, Monday, August 13, 2018, when he appeared before the Public Accounts Committee to respond to the Auditor-General’s findings in his 2016 Audited Accounts of Ghana said they are not privy to the terms of settlement the Court entered into with the businessman for the repayment of his debt to the State.

“I think if you need further information on the settlement terms, we will do well to get in touch with the AG’s office and ask for the terms sheet which will indicate how many months or years with which it will take him to settle the balance of GH¢46 million”, he noted.

His comment was in response to a question posed by Hon. Ras Mubarak, a member of the PAC as to what steps the government is embarking on to retrieve the rest of the money Mr. Woyome owes the State.

Commenting further on the issue, he said it is only the Ministry of Justice and Attorney-General’s Department that could give a specific time frame Mr. Woyome is expected to repay all his debt owed the state based on the terms of settlement he entered into with the court.

Briefing Members on what Mr. Woyome has paid so far to the State, Mr. Ofosuhene read a letter from the Attorney-General’s Department confirming the payment of GH¢4,667,566.62 to the State.

The said letter dated March 8, 2018, in part read “kindly find below a computation of payment made by Mr. Woyome based on the terms of settlement and the proceeds from the Garnishee. (i) Monies collected or recovered from the Garnishee Order is GH¢167,565,62 and (ii) monies paid as a result of settlement is GH¢4.5million”.

Having read some portions of the said letter, Mr. Ofosuhene confirmed that the payments that have been made by Mr. Woyome and the proceeds from the Garnishee totalling GH¢4,667,556.62 have hit the accounts of the consolidated funds.

Mr. Woyome was indicted by the Auditor-General in his 2010 audited report for wrongfully receiving the payment of GHc51.2 million judgment debt.

After years of battling the state over the said amount, he finally in March 2017 petitioned the International Court of Arbitration of the International Chamber of Commerce over the controversial GHc51.2 million judgment debt paid him.

The move follows a Supreme Court ruling in 2016 which pronounced that he (Woyome) received the said money fraudulently from the government for an invalid contract between the state and Waterville Holdings in 2009 for the construction of stadia for CAN 2008.

All efforts by state officials to retrieve the money have proved futile as the businessman insists the law has not been fair to him.

He has however refunded GHc4million to the state with the Attorney-General’s department and the Controller and Accountant-General’s Department all confirming the payment.

Although he subsequently promised to pay the outstanding balance by quarterly instalments of GHc5million beginning from April 1, 2017, he has reneged on that promise, compelling the state to Garnishee some of his properties at GHC167,565.62.

Proceeds from the Garnishee has also been paid into the consolidated fund with both the AG and the CAGD confirming same.

Directors of collapsed banks may face Finance C’ttee – Ato Forson

The Finance Committee of Parliament is preparing to tackle the crisis in the country’s banking sector in a move that may feature public hearings to probe officials of collapsed banks.

According to the ranking member on Parliament’s Finance Committee, Cassiel Ato Forson, the leadership of the committee has resolved to investigate the crisis even though the House is currently on recess.

In the past few days, an investigative report has surfaced indicting the directors and managers of some of the banks for the collapse.

The reports outlined bad governance practices, incompetence and mismanagement by top management and board members for the collapse off at least two of the banks, UT and Capital banks.

Also, last week, the central bank revoked the licenses of five local banks.

Speaking to Citi News, the Ajumako Enyan Essiam MP says the committee is working on ironing out the modalities for the parliamentary probe.

“I can confirm to you that I have had a conversation with the Chairman of the Finance Committee and we have agreed that the Finance Committee of Parliament will have to consider some hearings relating to all the stakeholders concerning the collapse of the banks.”

Parliament is currently on recess, and the committees will have to agree on a timetable when the MPs arrive in Accra, he explained.

The committee will also need the blessings of the leadership of the MPs.

“For us to go on, we will have to get the leaders of Parliament; both the Majority and Minority leader to be in sync with our position,” Mr. Ato Forson.

In the past year, six banks have collapsed; Capital Bank, uniBank, Sovereign Bank, Construction Bank, The Beige Bank, UT Bank and Royal Bank.

A recent investigative report further entrenched the sentiment that the directors and boards of these banks were guilty of gross mismanagement.

The report noted that Capital Bank misused a significant amount of support from the Bank of Ghana (BoG) when it was struggling.

Among the flagged transactions were GHc 27.5 million used for business promotion and handled by a board member; transfers to IFS amounting to GHc 23.9 million, transfers to Nordea Capital amounting to GHc 65 million, and transfers to All-Time Capital amounting to GHc 130 million.

Part of this amount is believed to have been used to set up Sovereign Bank, which also collapsed.

On the UT Bank side of things, payments were made to former Chief Executive Officer and Director Mr. P.K Amoabeng from a loan defaulting entity, Kofi Jobs Limited.

The loans which amounted to GHC 5m were never disclosed to the Board of the U.T Bank.

The report also revealed that there was a significant amount of inter-group lending involving other subsidiaries of the holding company, UT Holdings, while connected party loans were made to some companies.

Source: goldstreetbusiness.com