The Bank of Ghana (BoG) has stated that directors and shareholders of the five collapsed banks will be stripped of any future role in the banking sector once they are found guilty by a court of competent jurisdiction.
Many officials of the collapsed banks who are currently facing interrogation by the Economic and Organised Crime Office (EOCO) are battling a career-threatening charge to absolve themselves of any wrongdoing.
A highly place source at the BoG told the Daily Graphic in an interview that the central bank would enforce to the letter the Banking Act, 2004, Act 673, which spells out sanctions for directors of banks who are implicated in any act of insolvency or folding up of their banks.
Quoting the relevant law to back the point, the source said the reports of the directors and senior managers of the collapsed banks had been sent to EOCO.
“Nobody will be spared; once found guilty by a court, their careers in the banking industry in the country are ended,” it said.
The BoG last week revoked the licences of five universal banks and subsequently merged them into a new bank – Consolidated Bank Ghana Limited – to be headed by Mr Nii Amanor Dodoo of KPMG.
The entities – the uniBank, the Royal Bank, the Sovereign Bank, the Construction Bank and the BEIGE Bank – were found to have committed various regulatory and financial breaches that made them insolvent and unfit to continue operations.
At a press conference in Accra, the Governor of the BoG, Dr Ernest Addison, said the Consolidated Bank was established by the government and issued a licence to operate on August 1, 2018.
Fit and proper
According to the source, the central bank was currently applying its Fit and Proper guidelines which could affect some of those officials and top management staff of the collapsed banks.
“We have come to a point where we have to enforce the rules very strictly, without fear or favour, to restore sanity to the banking sector,” the source added.
The latest guideline to be issued by the BoG for the banking sector, aside from two others, in less than a month is the Fit and Proper Directive.
Among others, the directive sets the framework which helps in determining whether a person is fit to be a director or a significant shareholder or to holder a key management position within an organisation.
Experts hail move
The move by the central bank to revoke the licences of the insolvent banks was widely commended by financial analysts who said it was timely.
Dr Sam Ankrah, an international investment and financial expert; Mr Ken Thompson, the Mangaging Director of Dalex Finance, and Mr Sidney Casely-Hayford, a chartered accountant and member of Occupy Ghana, a local pressure group, have all hailed the move by the BoG and expressed the desire for swift action to be taken on the directors of the now defunct banks.
Although some of the directors of the collapsed banks have denied any complicity in the collapse of their financial entities, they plan to make their case to the state investigative body, EOCO.
Last-minute attempt
Some of the directors of the five collapsed banks had, at the 11th hour on Tuesday, July 31, 2018, prior to the BoG’s news conference on Wednesday, August 1, 2018, presented a petition to the central bank, indicating their readiness to meet all their obligations to the bank in good time.
One of the directors who spoke to the Daily Graphic on condition of anonymity said: “It’s not over yet; we are still making our case, this is because the central bank is getting tougher with its rules governing the financial sector.”
Source: Graphic.com.gh
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It sounds like fraud to me and more so the Directors of the bank failed to do due diligence. This multilevel marketing is a carbon copy of what most Nigerian banks to collapse their banking sector. Now Ghana is tagging along. The BoG is sitting on the sideline like a harmless duck. All the Board members of these failed banks must be prosecuted and if found guilty should due serious time I'm jail including pastor Otabil, Amoabeng et al
IT SEEMS TO ME THAT THE BANK OF GHANA (BOG)IS ITSEF CONFUSED ABOUT PUNISHMENT TO BE SERVED TO THE DIRECTORS AND ALSO, THEY SAY, THE SHAREHOLDERS OF THE COLLAPSED FIVE (5) BANKS. WHY SHOULD A SHAREHOLDER WHO IS NOT A SHADOW DIRECOTR NOR PLAYS ANY ROLE IN THE DAY TO DAY ADMINISTRATION OF A BANK BE PUNISHED FOR THE COLLAPSE OF THAT BANK? AND WHY SHOULD A DIRECTOR OF A COLLAPSED BANK BE BANNED FOR LIFE FROM THE BANKING SECTOR BECAUSE HE/SHE WAS A DIRECTOR. EVEN IN THE UK AND USA SUCH DIRECTOR ARE NORMALLY BANNED NOT FOR LIFE BUT FOR BETWEEN FIVE (5)YEARS TO A MAXIMUM OF FIFTEEN (15) YEARS AND NOT FOR LIFE, OGA. AND IF SHAREHOLDERS ARE PUNISHED JUST MERELY BECAUSE THEY ARE SHAREHOLDERS OF A COLLAPSED BANK WHY WOULD ANYONE LIKE TO INVEST IN A BANK OR COMPANY WHEN SHARES ARE BEING FOATED KNOWING FULL WELL THAT IF THE DO BUY SUCH SHARES THEY WOULD BE CALLED TO RECEIVE PUNISHMENTS SHOULD THAT BANK OR COMPANY COLLAPSE IN THE FUTURE. BUT IN ANY CASE WHY ARE THE DIRECTORS OF THE FIRST TWO BANKS (UT AND CAPITAL BANKS)THAT COLLAPSED NOT BEING BROUGHT TO BOOK AND BANNED AS WELL? IS IT BECAUSE MENSAH OTABIL AND OTHERS ARE WELL KNOWN SYMPATHISERS OF THE RULING NPP GOVERNMENT AND THAT THE MAIN SHAREHOLDER OF UNIBANK, DR DUFFOUR IS A KNOWN SYMPATHISER OF THE OPPOSITION NDC PARTY. BOG, DON'T THROW DUST INTO OUR EYES BY HIDING BEHIND NPP GOVERNMENT TO PERPERTUATE EVIL AGAINST THE GHANAIAN BUSINESS FRATERNITY. ONU LOO?