Perhaps tired of being a Savings and Loans company after three years, ambitious shareholders of First Capital Plus planned to become a bank but they needed ¢60m.
It has turned out they did not need ¢60m, they needed the BoG to just look the other way. And in December 2013, they did.
According to an exclusive report, the central bank was either complacent or complicit when shareholders of First Capital Savings and Loans company were awarded a provisional licence in July 2013 and a full licence later in December 2013.
Capital Bank shareholders had only ¢23.3m - less than 50% of the ¢60m capital requirement. In their defence, they also produced evidence to show they had ¢51.5m illiquid investment - basically money that you can see but cannot touch.
They could sell of these liquid investments and get more than they needed to meet regulations.
A convinced BoG headed by Dr. Henry Kofi Wampah granted them a provisional licence with clear instructions to find the additional ¢36.7m and lodge it in "an escrow account which should be verified by the Bank of Ghana."
But on D-Day of obtaining a final approval to operate as a bank, Capital bank shareholders showed they had put their monies in other financial institutions and not the escrow account they were directed to open.
In essence, they showed to BoG, they had the money but BoG never saw the money. Somehow BoG was satisfied with this explanation which their regulations does not allow it to be satisfied with and granted Capital Bank a final licence.
The report states "This has now been confirmed to be the genesis of the capital adequacy issues of the Capital Bank."
It continues to state that "the new funds were never transferred to the Capital Bank" and began to refer to it as "re-engineered capital."
The bank therefore was doomed to struggle right from day one of its newly acquired class 1 bank status.
The report states BoG was repeatedly informed by their Bank Supervision Department of the glaring infractions but "there is no evidence of sanctions to either the institutions concerned or the individuals in senior management and on the Board of Directors."
In a 2015 Capital Bank examination report, only four out of 24 problems were identified by bank inspectors. Some of the items not rectified included "weak board oversight of the bank's risk management oversight function."
The report castigates the Board of Capital bank for what the reports describes as "simply negligence" or "wilful misconduct" in failing to implement 2014 BoG recommendations to the bank.
The BoG did not consider that its inactions was going to eventually hurt customers of the bank and the general public, the report indicated.
But it got worse after the BoG pumped ¢610m into the struggling bank in October, 2015. Part of that money was eventually used to set up another bank, Sovereign Bank in January 2016 which also collapsed in August 2018.
BoG has not been able to retrieve the bail-out money to Capital Bank and the Ghanaian-owned bank headed by Rev. Fitzgerald Odonkor and founded by William Ato Essien collapsed in August 2017.
Capital Bank which began in October 2009 as a First Capital Plus, a microfinance company, and progressed into First Capital Plus Saving and Loans Company.
All its 15 branches in five regions and 355 branches were absorbed into GCB bank. Several staff were later laid off and stories of their miseries have been unending.
Source: myjoyonline.com
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WHEN WE ALLOW POLITICIANS UNFETTED ACCESS TO POWER THAT'S WHAT HAPPENS.ISN'T IT CURIOUS THAT EXACTLY 6 MONTHS AFTER JDM WAS SWARNED IN AS PRESIDENT ATO ESSIEN OF FIRST CAPITAL IS ABLE TO SECURE BOTH TEMPORAL AND FINAL UNIVERSAL BANKING LICENCE THAT SAME YEAR? WHILE AT UT BANK, IBRAHIM MAHAMA WAS EMPTYING CUSTOMERS' DEPOSITS TO THE TUNE OF OVER 300M USING JDM AS HIS COLATERAL. BUT FOR THE 2016 ELECTION RESULTS, THE FINACIAL SYSTEM IN GHANA WOULD HAVE COMPLETELY COLLAPSED UNDER THESE GREEDY BOSTARDS. THEY HAVE NOT PAID BACK THE MONIES AND STILL WALKING FREE ON THE STREETS OF GHANA. DR WAMPAH AND DR. ISSAHAKU NASHIRU SHOULD BE PROSECUTED FOR THE MESS THEY LEFT BEHIND.
That Adongo ***barred word*** is blaming Addison. He has forgotten that it was Wampah who supervised this mess.These NDC ***barred word*** should all be sent to jail. They have no right to talk about governance. They have no right also to talk about the Ameri deal because they messed it up at the beginning. NDC should ***barred word*** to let the competent people rule the nation.
pure fraud and BOG Complicit, BOG should be resolved worse that GFA
I cry. What offence has Ghana committed against her sons and daughters to be treated shabbily by like this. I cringe and cry And these people are supposed to go scot-free because BOG is not interested in prosecution. If those in authority really want Ghana to run well at all levels (top, middle and bottom) then they better heed the cries of the people. To imagine that through intrigue and greed, people can dissipate deposits by their customers undetected, and yet, upon detection, receive a whooping GHs610m of the poor taxpayers money and go ahead to dissipate it as well. And BOG cared very little what they did with the GHs610m dished out to them!!!!! God help the Republic of Ghana. I urge the government to prosecute these matters openly to show us who did what so that we know whom to give honour to and whom to shun. MY HEART BLEEDS FOR GHANA, MY MOTHERLAND
Aaaarjei!! Scientific girl is in denial.Upright indeed!!! Show me your friends and i will tell show your character,Birds of the same feathers and by their fruits ye shall know them!!
@Scientific Girl, you should be careful of preachers of prosperity gospel. They are all using the church to enrich themselves.
Dr. Mensah Otabil is upright in character. He has not taken anybody's money!
If Former BOG Governor acted wrongly agaianst the law, please prosecute him.
pastor mensah otabil was the board chair of capital bank. and according to the report he was knee deep in the diversion of the ghc610m given to capital bank by the bank of ghana to sort out their financial mess in 2015. the moneys were transferred into the private accounts of the directors of capital bank and currently cannot be accounted for. i am very disappointed in the greediness of this man of God.