The Bank of Ghana (BoG) has suspended the operations of DKM Diamond Microfinance Company Limited for violating the Banking Act.
Also, the Financial Intelligence Centre (FIC) has frozen five accounts of the company, directing an immediate freeze of all debit transactions on any of the five accounts.
A letter signed by the Chief Executive Officer of the FIC, Mr S.T. Essel, listed the accounts as DKM Mining, Transport, Shea Butter, Cement Depot, all limited liability companies, and DKM Gas Filling Station, all under the DKM Group.
Denial
But in a swift rebuttal, the company has denied any such actions by the two institutions, insisting that “we are a genuine financial institution registered under the Banking Act of Ghana and under no circumstance should we carry out any activity which is contrary to the approved regulations by the BoG”.
A statement from the company, signed by its Head of Communications in Sunyani, Mr Ransford K. Agyemang, urged clients not to panic but continue to do business with the company.
The company’s suspension by the BoG follows its failure to comply with the terms and conditions stipulated in its licence, as well as holding insufficient assets to meet its liabilities to depositors.
It has also been found culpable of carrying on operations in a manner which appears to the BoG to be contrary or detrimental to the interest of its depositors or the public.
It has been found to have violated statutory restrictions on exposures and restrictions on the establishment of subsidiary companies.
These were contained in a notice issued by the BoG to banks, non-bank financial institutions and the general public.
The notice, signed by the Secretary of the BoG, Mrs Caroline Otoo, said, “The Bank of Ghana, in accordance with the provisions of the Banking Act 2004 (Act 673) as amended, Section 65(1) wishes to inform all banks, non-bank financial institutions (NBFIs) and the general public of the placement of a ninety (90)-day moratorium on the operations of DKM Diamond Microfinance Company Limited with effect from Monday, May 11, 2015.
Anti-money laundering
For the part of the FIC, it has requested DKM, in line with the Anti-Money Laundering Act, to furnish it with the company’s mandate and account opening forms, legible copy of photo identity card, evidence of know your customer and customer due diligence and all transaction details from the period the relationship began to date.
DKM is also supposed to provide the centre with copies of all SWIFT transfers received on the account by close of Tuesday, May 12, 2015.
In its reaction, the company said it had neither received any official document from the FIC nor the BoG restricting its subsidiaries from transacting businesses with first-class banks.
“Our main operational objective is to serve and we will continue to do just that by handling deposits diligently in accordance with approved regulations by the BoG,” it said.
Customers shocked
From Bolgatanga, Vincent Amenuveve reports that some customers of DKM Microfinance Limited in the Bolgatanga Municipality have expressed disappointment at the 90-day moratorium placed on the operations of the company by the BoG.
They, however, expressed optimism that the company would be able to meet all the requirements by the BoG because they believed DKM had enough assets to meet the deadline.
When the Daily Graphic visited the premises of the company yesterday, the usual busy atmosphere was completely absent, as only a small number of people were seen reading the notices posted in front of the entrance to the office that had been locked.
Groups of people stood in disbelief discussing the issue, apparently expressing fear as to whether the company would be able to meet the requirements.
One of the customers, Madam Barikisu Yakubu, a teacher, apparently saddened by events, said it was rather unfortunate that she had made some investment and was expected to collect some money due her this week.
There was no official of the company, including its security officers, around to talk to.
Sunyani
Meanwhile in Sunyani, hundreds of people converged on the office of DKM Diamond Microfinance Company Limited opposite the Sunyani Coronation Park to read the contents of the notice, reports Emmanuel Adu-Gyamerah.
Some of the people who have investments in the company were anxious to hear some explanations from officials of the company who were locked up in discussions with officials of the BoG.
While some of them took pictures of the notices with their mobile phones, others stood in groups to discuss their fate as a result of the new development.
Vehicles using the road between the office and the Coronation Park had a hectic time gaining access as a result of the large number of people who gathered at the scene.
A sachet water seller, who preferred to remain anonymous, was seen sobbing, while carrying a plastic container.
She told this reporter that she was anxious to have more information about the development because she had GH¢2,000 investment with the company.
Others were, however, tight-lipped and refused to talk to anybody they suspected to be from the media.
An official of the company who later addressed the crowd, however, assured customers of the safety of their investments and asked them to remain calm while the company resolved the issue with officials of the BoG.
DKM Microfinance Company Limited, which has operated in Sunyani for some time now, enjoys the patronage of the people because of its lucrative interest on deposits.
A customer told the Daily Graphic that a recent promotion organised in April, 2015 attracted 55 per cent interest on deposits for two months, which was far more than the 30 per cent interest the company gave for the same period before the promotion.
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