Parliament To Begin Enquiry Into Collapse Of 7 Banks

Parliament will, on September 6, this year, begin a full-scale public enquiry into the circumstances leading to the collapse of seven indigenous banks.

Already, the Economic and Organised Crime Office (EOCO), which was asked to probe the circumstances, has submitted its findings to the Attorney-General for advice and possible prosecution.

  The Parliamentary Select Committee on Finance is meeting at 11 a.m. today to firm up a roadmap for the enquiry.

In an interview in Accra Tuesday, the Chairman of the Finance Committee of Parliament, Dr Mark Assibey-Yeboah, said the week-long enquiry would examine the roles played by each of the key directors in the collapse of the banks.

Dr Assibey-Yeboah, who is the NPP MP for New Juaben South in the Eastern Region, said the focus of the investigative committee would be on the role played by the Bank of Ghana (BoG) and the lapses in its supervisory functions.

The committee would also examine the culpability of the BoG and the part played by some of its officials in the collapse of the banks.

The BoG, on August 1, 2018, revoked the licences of five badly performing banks and created the Consolidated Bank as the receiver to manage the assets of the five collapsed banks.

The entities are uniBank Ghana, the Royal Bank, the Beige Bank, the Sovereign Bank and the Construction Bank.

The central bank last year rolled out measures to strengthen the financial industry in the country, leading to the collapse of the UT and the Capital banks.

Ghana’s banking sector has faced challenges, such as poor corporate governance and risk management practices, related party transactions, regulatory non-compliance and poor supervision.

The crisis in the banking sector has triggered calls for the prosecution of the directors of the failed banks.

Culpability of persons

But Dr Assibey-Yeboah said the truth and culpability of persons involved in the crisis could be unravelled only after a full-scale enquiry.

“This is a matter of national interest, and as representatives of the people, we cannot sit and watch while people cause the country to lose millions of cedis.

“We also have to examine the role of the newly created Consolidated Bank and establish who the directors of the banks are,” he stated.

“The Minister of Finance will also appear before the investigative committee to answer questions on the source of funding for the Consolidated Bank, how it acquired its licence and the money it used in acquiring the licence,” he added.

Other institutions to appear before the committee are KPMG, the directors and managing directors of GCB Bank Limited which assumed the assets of the collapsed UT and Capital banks under the purchase and assumption agreement and the Ministry of Finance.

All the 25 members of the Finance Committee will form the investigative team, with the power to co-opt any member of Parliament.

According to Dr Assibey-Yeboah, the findings of the committee would help it make far-reaching recommendations on the way forward for the country’s banking industry.

Calls for prosecution

The BoG has already announced plans to prosecute executives of the failed local lenders suspected to have dissipated depositors’ funds and carried out insider dealings.

The bank is also considering barring culpable directors from operating in the Ghanaian financial sector.

In a report on uniBank, the biggest of the failed lenders and ranked as the country’s sixth largest lender by assets before its collapse, the BoG cited shareholders and other affiliates as taking for themselves GH¢5.3 billion ($1.1bn), representing 75 per cent of its total assets.

It said GH¢3.7 billion of the funds taken by shareholders was neither granted through the normal credit delivery process nor reported in the bank’s loan books.

But the Founder of uniBank, Dr Kwabena Duffuor, has rejected the charges.

AG to formally charge

The Economic and Organised Crime Office (EOCO) has submitted its findings to the Attorney-General, who is expected to formally charge the Founder of the Capital Bank, Mr Ato Essien, and some directors and management members of the bank.

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