President of UT Group of companies, Prince Kofi Amoabeng, has said he still finds it very difficult in understanding why the government of Ghana closed down his company UT Bank despite interventions by some UT investors to bail them out.
“If UT Bank owed 800 million and an investor comes and says I’m ready to pay half of it (400 million) and Bank of Ghana (BoG) writes off the 400 million but decides to close down the bank which will cost the nation at least 2.2 billion, it didn’t make sense” he said on the ‘KSM Show.’
He said it is easier to lose that 400 million than to incur a cost of about 2.2 billion on a country like Ghana, plus collateral damages, unpaid staff among others.
“It’s as if the government did not take their time to really evaluate the options they had but when people say that the action is to get to me, then it is really ridiculous because you can’t get me. If you target me you target the wrong person” Mr Amoabeng told his critics.
Prince Kofi Amoabeng, however, indicated that the government’s action was surprising because of his allegiance to the Finance Minister, Ken Ofori Atta and to President Akufo-Addo because of his Akyem lineage.
He reiterated that UT Bank as a listed company had about 15,000 shareholders whose investments were just disenfranchised because of the bank's closure and nothing has happened to them.
Mr Amoabeng advised that as individuals when things are going on very well, we have to ask ‘God why me’ but when things are not going on well then we need to ask ‘God what’s next’.
He said he always feels sad anytime he sees ex-staff of UT Bank selling along the road or indulged in menial jobs.
He indicated that he was the last person to hear of the collapse of his bank even though a day before the collapse, he had spoken to the Finance Minister, Ken Ofori Atta, he never mentioned of the collapse until 8 am that he called his daughter.
UT Bank and Capital Bank were deeply insolvent, meaning that their liabilities exceeded their assets, putting them in a position not to be able to meet their obligations as and when they fell due.
“Despite repeated agreements between the Bank of Ghana and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls, the owners and managers of UT Bank and Capital Bank were unable to increase the capital of the banks to address the insolvency,” BoG statement said.
The BoG indicated that to protect customers, the BoG decided to revoke the licenses of UT Bank and Capital Bank under a Purchase and Assumption transaction.
Their licenses were revoked and at the same time, the BoG approved a Purchase and Assumption agreement, which allows GCB Bank to take over all deposit liabilities and selected assets of both UT Bank and Capital Bank.
These actions according to the BoG are in line with the provisions of section 123 of the Banks and Specialised Deposit-Taking Institutions (SDIs) Act, 2016 (Act 930).