BoG being opaque with Capital, UT Banks’ demise – XdsData boss

The Chief Executive Officer of XdsData Mr. George Ahiafor has expressed his unhappiness about the lack of transparency on the part of Bank of Ghana, BoG, in liquidating Capital Bank and UT Bank in August last year.

Speaking exclusively to Goldstreet Business in Accra, he said it is surprising that as at now no-one is being held accountable for the demise of the bank including the board members and the auditors who oversaw this unfortunate development.

“The collapse of the two institutions did not happen overnight meaning either the auditors did not know what they were doing or the board simply refuse to heed to the auditors’ report and make the necessary adjustments to ensure the bank remains solvent and the shareholders’ funds intact.

“Definitely the auditors raised queries on the banks’ operations and it will be interesting to know what happened to those queries. These are all very relevant questions that the central bank must apprise the general public with most especially that of UT Bank which was listed on the Ghana Stock Exchange, GSE.

“The modalities that BoG used to sell the assets of the two collapsed financial institutions are have not been openly declared and what is most worrisome is that while GCB Bank has taken over the assets we are not being told who is assuming the debt. Remember assets can be sold but liabilities are never,” added.

Continuing, Mr. Ahiafor, CEO of Ghana’s premier credit reference bureau said since the collapse of the banks in August 2017, it is surprising that no member of the board has been charged to court for financial impropriety.

According to him, the reports on the collapse of the two banks suggested that shareholders on the board of the banks took hefty loans which they were unable to pay and it is surprising that the apex bank has not adopted a more aggressive posture to recover the funds. The banks were in 2016 given a rescue package of more than GHC2bn of public funds which must be paid pay back to the state.

According to him, there was lack of transparency in the takeover though the BoG said GCB bank was chosen out of three others on the basis of purchase price, cost of funding, branches to be retained, staff to be employed and impact on the acquiring bank’s capital adequacy ratio.

The XdsData CEO pointed out that one issue that is still not clear in the face of the collapse is who will refund the shareholders’ funds to them and this is an issue BoG and PwC are not talking about. This unfortunate situation would not have arisen if BoG had done proper due diligence on the directors and paid more attention to the two banks’ audited accounts and taken measures to stem the rot adding the collapse did not just happen overnight but was systematic and could have been detected and stopped.

By Kafui Gale-Zoyiku