MP for Bolgatanga Central, Isaac Adongo
Member of Parliament for Bolgatanga Central, Mr Isaac Adongo says the board of the Agricultural Development Bank (ADB) is operating illegally as it was yet to be approved by the Bank of Ghana, contrary to the requirements of the Banks and Specialised Deposit-Taking Institutions Act, BSDI Act 2016 (Act 930).
He also cited three members of the board as not being fit and proper to hold that position. Mr Adongo mentioned the ADB board chairman, Mr Alex Bernasko, the Managing Director and board member, Dr John Kofi Mensah, and Madam Mary Abla Kessie, another board member as the three persons whose previous roles in the defunct UT and Capital banks (respectively) make them not fit and proper to be on the board of another bank.
In a lengthy article that critiqued government’s handling of the Ghana Amalgamated Trust (GAT) and its mode of operation, the legislator said the Bank of Ghana and the government needed to be concerned with the gross violation of the BSDI Act 2016 (Act 930) by Ken Ofori-Atta and Bank of Ghana with regards to the board of ADB Bank Limited.
“Why has BOG not approved the board of ADB? Why are people involved in the collapse of UT Bank and Capital Bank allowed to sit on the Board of ADB Bank contrary to the BSDI Act 2016 (Act930),” he asked. He quoted Section 58 of Act 930 and the Bank of Ghana’s Fit and Proper regulations to buttress his position.
He said the section states categorically that ‘A person shall not be appointed or elected or, accept an appointment or election , as a director or key management personnel of a bank, specialised deposit taking-institution or financial holding company if that person (d) has been a director, key management personnel or associated with the management of an institution which is being or has been wound up by a court of competent jurisdiction on account of bankruptcy or an offence committed under an enactment’.”
“The resolution of UT Bank and Capital Banks were in response to reported breaches of an enactment, which enactment was referred to as Act 930 by BOG.
“Yet, it is on record that the ADB Board, chaired by Mr Alex Benarsko, a former director of UT Bank, has not been approved by the Bank of Ghana. The board, however, was inaugurated on the authority of Ken Ofori-Atta. Also, in blatant violation of Section 58(d) of Act 930, three ‘unfit’ persons sit on the ADB Board,” Mr Adongo alleged.
He explained that the board chair, Mr Alex Benarsko, was a director of UT Bank prior to its collapse in 2017 while the the current MD, Dr John Kofi Mensah was also a former MD of Capital Bank.
“In fact, Dr Mensah has been sued by the Receivers of Capital Bank to pay back GHS15.7 million that he is believed to have misappropriated to himself while serving as MD.
“Also, a former Secretary to the board of UT Bank, Madam Mary Abla Kessie, is now a director of ADB Bank. In effect, three persons, who are not fit and proper, according to Bank of Ghana’s own rules, sit on the board of ADB Bank, a bank that is 60 percent owned by the Central Bank,” he said.
He further charged the Minister of Finance to address “these corporate governance breaches at ADB” and rather stop the “scheme to take over our ADB Bank through the backdoor.”
On ADB’s addition to the GAT list of banks, Mr Adongo said “with all honesty, ADB should not be on the list of banks to be supported by GAT. “This is because Government has already fully met the minimum capital requirement of ADB Bank,” he said.
He recalled that at the Extra Ordinary Annual General Meeting held in late December 2018, shareholders of ADB Bank Limited, largely the BOG and the Ministry of Finance, agreed that BOG will convert its loan of GHC150 million, which represents unpaid liquidity support to the ADB Bank, into equity while about GHC233 million was to be raised by shareholders through a renounceable rights issue.
“I am fully aware that the Government took up all the rights with Ken Ofori-Atta paying the Gh233 million on behalf of the state. This means ADB Bank Limited has met the minimum capital requirement by GHc427 million.
“So, why is ADB Bank Limited on the GAT list if not for dubious reasons? Clearly, Ken Ofori-Atta is bent on selling ADB Bank Limited,” he alleged. He said “the worst part in all of these is that as we speak, there is neither a due diligence nor a valuation of ADB Bank Limited. How then can one determine the value of ADB to be able to enter into discussions with third-party investors like GAT for equity investment?”