Banking sector clean-up: Former BoG staff, UT Bank executives facing several charges

Two former officials of the Bank of Ghana, alongside three other executives of defunct UT Bank are facing different types of charges in an Accra High Court (Commercial Division) over their purported roles leading up to the collapse of the bank.

According to the charge sheet filed at the High Court, former second Deputy Governor, Dr. Johnson Asiama and former Head, Banking Supervision Department, Raymond Amanfu, have been charged with willfully causing financial loss to the state.

Also, Head of Treasury of the UT Bank, Catherine Johnson; former Chief Executive Officer of UT Bank, Prince Kofi Amoabeng; and Robert Kwesi Armah, General Manager of Corporate Banking of UT Bank and UT Holdings – the parent company of UT Bank, have been charged with various offenses such as dishonest appropriation of US$7million and other deposits of customers and fraudulent breach of trust, among other charges.

The trial judge is His Lordship Justice Bright Mensah, a Justice of the Court of Appeal, sitting as an additional High Court judge.

So far, the prosecution has called Eric Nana Nipah, the Receiver of UT Bank (in receivership), Stephen Afotey, Registrar of the High Court (Commercial Division) and Stephen Antwi-Assimeng, a former Chief Executive Officer (CEO) of the defunct UT Bank to testify on its behalf.

In his testimony, the first Prosecution Witness, Eric Nana Nipah, informed the Court that several investments placed by various companies such as, SSNIT SOS Fund, Forestry Commission, ECG Staff Fund, WAICA-Re and the National Communications Authority with UT Bank were moved out to UT Holdings without proper authorization.

He testified that UT Holdings is not licensed to engage in such investment activities. The total amounts invested with UT Bank but transferred to UT Holdings without proper authorization is GH¢51.3million and US$8.7million.

The second Prosecution Witness, Mr. Afotey, testified that an amount of US$7 million was deposited with UT Bank on the instructions of the Court. However, this amount could not be traced when UT Bank was taken over by GCB Bank.

In November, the Court heard the testimony of the third Prosecution Witness, Stephen Antwi-Assimeng, the Chief Executive Officer of UT Bank at the time of the revocation of its license. He testified that UT Bank was already on liquidity support from BoG at the time he joined the bank.

Mr. Antwi-Assimeng intimated that UT Bank relied heavily on borrowing from BoG to deal with its liquidity challenges.

In his testimony, Mr. Antwi-Assimeng indicated that UT Bank established letters of credit in the total sum of GH¢141million for some customers of the bank and these letters of credit were maturing in May and July of 2016. He further informed the Court that the customers did not provide funds for the Letters of Credit and neither did UT Bank have liquidity on maturity.

Testifying further, Mr. Antwi-Assimeng stated that the bank had situations where a number of international lenders were calling in their loans because UT Bank had defaulted and some of the loans had reached maturity.

He testified further that UT Bank was experiencing an average of GH¢40million loss of customer deposits, one of the bank’s key sources of liquidity. This, according to him, resulted in acute liquidity shortage, with UT Bank forced to pay higher interest rates to attract new depositors.

Proceeding further, Mr. Antwi-Assimeng informed the Court that UT Bank, on application to BoG, received liquidity support of GH¢460million with the instruction not to use any part of the additional liquidity support for unapproved purposes. He also informed the Court that the bank also applied to BOG for an unsecured liquidity support of GH¢30million.

He explained that UT Bank applied for the unsecured liquidity support because it did not have adequate securities to provide collateral for this facility.

The matter has been adjourned for further hearing in mid-December this year.