Taking the governor on in his editorial phase of his present on Tuesday, eight January 2019, Mr Adom-Otchere stated Dr Addison’s behaviour, since he took workplace, has prompted the central financial institution to lose respect within the eyes of Ghanaians.
The regulator lately revoked the licence of Heritage Financial institution, whose Board of Administrators was chaired by Ghana’s longest-served Finance Minister, Prof Kwesi Botchwey. Additionally, the licence of Premium Financial institution was revoked by the central financial institution, as a part of its clean-up train of the banking sector.
Amongst different issues, the central financial institution stated the supply of Heritage Financial institution’s capital for its institution was suspicious, including that almost all shareholder, Seidu Agongo, failed the “fit and proper person” check and so couldn’t personal a financial institution, since he was concerned in felony prosecution so far as the GHS271 million Ghana Cocoa Board (COCOBOD) fertiliser scandal was involved.
The ex-board of Heritage Financial institution, nevertheless, issued a press release describing the regulator’s allegations as “complete falsehoods” and “inaccuracies”.
In Mr Adom-Otchere’s view, “People are unnerved because of the conduct of the central bank, and the conduct of the governor of the central bank in regularly addressing press conferences in which there is contradiction after contradiction after contradiction”.
“The central bank has still not told us, for instance, that those banks that have not met the minimum capitalisation requirement, like those banks who are going to benefit from the Ghana Amalgamated Trust (GAT); what is their status as of 1 January 2019? Are they still class one banking licence holders? He held an entire press conference and did not address a matter that sticks out so clearly like this. … You just leave that whole lacuna there. What should we do with it? We should guess it? You see, the central bank is in serious trouble. And this banking reform thing is creating a worse problem for the people at the central bank.
“When you read some of the things Dr Botchwey said, it will shock you. And if Dr Botchwey is right, and because of his stature, I’d like to believe him, then it is shocking the way the central bank behaves.
“The governor of the bank of Ghana holds a press conference, the governor who holds a sacrosanct position that when he speaks nobody should speak. He speaks more than the Finance Minister, he speaks as if he’s an MP, every day he’s doing a press conference, he’s the only governor in the history of Ghana, who has done a press conference and he’s not talking about monetary policy.
“Dr Addison is the only governor in the whole world who runs press conferences like … Have you ever heard any governor anywhere doing a press conference? Dr Addison holds press conferences just like that and at every press conference, he doesn’t impress. He contradicts himself.
“Dr Kwesi Botchwey is virtually telling the governor in the press [statement] that you’re lying. That’s what he’s saying. Why should we subject our central bank governor, the one who holds the entire authority of the central bank to these kinds of things? I hope that somebody is not manipulating him. Sorry to use that word, but this central bank governor must sit up and be a central bank governor. Take up the badge and the chair and the suit of distinction to be a central bank governor. We’ve seen them; Agama, Amon Nii Koi, Kwabena Duffour. We’ve seen them. Why, central bank governor? Dr Kwesi Botchwey says you are lying. And Dr Kwesi Botchwey was for 13 years the Finance Minister … and you have made allegations against him as board chairman of Heritage Bank and he says that you are lying. … They are telling you, Dr Addison, that you are dishonest. I’m sorry, this is what Kwesi Botchwey is saying”, Mr Adom-Otchere stated.
Learn under the BoG’s full causes for revoking the licence of Heritage Financial institution:
Heritage Financial institution Restricted (Heritage) was included on 31 January 2014 and was licensed by the Financial institution of Ghana as a common financial institution on four October 2016. The promoters/shareholders of the financial institution have been specified as Mr Seidu Agongo, Ms Fatima Adamu, Sarago Restricted, and Mr Sylvanus Kotey, who, collectively purportedly met the minimal paid-up capital of GHS 120 million.
As a part of its efforts to clear up the banking sector, the Financial institution of Ghana has just lately examined the affairs of Heritage and found numerous anomalies relating to its licensing, the sources of its capital, and associated celebration transactions.
The Financial institution of Ghana has consequently revoked the licence of Heritage Financial institution. Underneath part 16 (1) (a) (7) and (eight) of Act 930, the Financial institution of Ghana might revoke a licence and appoint a receiver beneath part 123 of the Act the place it is glad that an applicant offered false, deceptive or inaccurate info in reference to the appliance for a licence or suppressed materials info, and should, in instances of emergency, or within the public curiosity, revoke the licence of the financial institution with out discover. Additional, sections 9 and 12 of Act 930 authorise the Financial institution of Ghana to revoke a licence if it considers that vital shareholders of a financial institution are usually not appropriate.
The grounds for revocation of the licence are as follows:
The financial institution’s capital seems to have come from sources that are suspicious. Within the software for a banking licence, every shareholder of Heritage wanted to show their “ability to subscribe to the shares” of the financial institution. The Financial institution of Ghana is not glad that the unique sources of the financial institution’s capital are acceptable, when it comes to part 9 (d) of the Banks and SDI Act, 2016 (Act 930) and part 1 of the Anti-Cash Laundering Act of 2008 (Act 749), which requires acceptable capital to be obtained from lawful and clear sources. Particularly:
The promoters of Heritage offered proof to Financial institution of Ghana on the time of the appliance for a banking licence to the impact that an quantity totalling GHS 120.6 million was lodged with an area financial institution. The quantity of GHS 120 million was transferred to the financial institution from Agricult (an organization wholly-owned by Seidu Agongo, a promoter of Heritage), which funds seem to have been derived from contracts awarded to Mr Agongo by COCOBOD and are presently the idea of felony prosecution within the Excessive Courtroom of Ghana. In the meantime, it has come to the discover of the Financial institution of Ghana that the financial institution has but to reply to two Excessive Courtroom orders for disclosures relating to these and different contracts affecting the numerous shareholder Mr Agongo.
Whereas Mr Agongo claimed that his sources of capital for the financial institution included proceeds of a USD 19.25m contract with COCOBOD, Financial institution of Ghana’s subsequent investigations have proven that there was no such contract between COCOBOD and Mr Agongo. A number of contracts executed, nevertheless, existed between COCOBOD and Sarago Restricted (“Sarago”). Paperwork submitted to the Financial institution of Ghana for licensing of the financial institution made no point out of the contract between COCOBOD and Sarago nor the truth that Sarago (additionally a shareholder of the financial institution) was owned by Mr Agongo.
From its 2017 audited monetary statements, an quantity of GHS15.8m was transferred to the financial institution from an unnamed investor, which was attributed to unpaid called-up share capital, calling into query whether or not the minimal capital of the financial institution had been absolutely paid up on the time of licensing. From the identical monetary statements, an working loss was booked leading to a shortfall of GHS 20.6 m within the financial institution’s capitalisation. This was anticipated to be repaid by an unnamed shareholder by way of a switch of fastened belongings (branches) to the financial institution. Regardless of makes an attempt by the Financial institution of Ghana to affirm (i) the id of the unnamed shareholder, (ii) the idea of valuation of the fastened belongings, and (ii) whether or not the phrases of the transactions have been at arms’ size, and, in any other case acceptable, the financial institution and its shareholders, administrators, and administration have failed to make clear issues.
Sure shares of the financial institution have been held by nominee shareholders whose final useful shareholders weren’t disclosed to the Financial institution of Ghana. The shareholder on report for Sarago is one Ruth Leena Abazerri, though the Financial institution of Ghana has affordable grounds to consider that it is owned by Seidu Agongo. This is in breach of part 9 of the Anti-Cash Laundering Act, which requires the disclosure of useful possession of shares, in addition to regulation 9 of the Anti-Cash Laundering Laws (L.I. 1987) which require that useful house owners are usually not fictitious.
A number of associated get together transactions have been entered into between the financial institution and entities owned or managed by its vital shareholder Mr Agongo akin to Sassh Alliance, Moor Firm Restricted, and Kedge Firm Restricted, on phrases and circumstances that stay unclear and/or not clear.
The Financial institution of Ghana has decided, pursuant to sections 9 and 12 of Act 930, that almost all shareholder of the financial institution, Mr Agongo, doesn’t meet the “fit and proper person” check.
The financial institution failed to meet the GHC 400 million capital required as of 31st December 2018.
Learn under the complete response of the Prof Kwesi Botchwey-led ex-Board of Administrators of Heritage Financial institution to the BoG’s claims:
PRESS RELEASE BY THE FORMER BOARD OF DIRECTORS OF HERITAGE BANK LIMITED (CURRENTLY UNDER RECEIVERSHIP)
The Financial institution of Ghana on Friday, 4th January 2019 introduced the revocation of the banking licence of Heritage Financial institution Restricted on the next grounds;
(1) Suspicions relating to the supply of the financial institution’s capital and issues associated therewith together with the declare that it was derived from contracts with COCOBOD which have been the subject material of an ongoing legal prosecution;
(2) Points across the shareholding of the financial institution and alleged nondisclosure of final useful shareholders;
(three) a number of related-party transactions which weren’t above board
(four) the numerous shareholder was not ‘fit and proper”.
We would have preferred not to enter into any public disputation about these matters with the Central Bank so as not to further darken the cloud that hangs over the ongoing banking sector reforms. However, we owe a duty to ourselves, our cherished customers and our dedicated staff, who, in the face of numerous challenges remained committed to the vision of the bank to the very end, and to the general public, who have been keen observers of the developments in the banking sector, to clarify certain claims in the press release by the Bank of Ghana that are either complete falsehoods or inaccurate at best. We wish, therefore, to state as follows:
(1) Suspicious source of capital and related matters
We find it puzzling that the Bank of Ghana should now be disputing the existence of a contract between HBL’s important shareholder and COCOBOD, when the financial institution, as a part of its due diligence forward of the granting of HBL’s provisional banking licence, had requested and acquired affirmation from COCOBOD of the existence of the contractual preparations between COCOBOD and the stated shareholder.
We additionally need to state on report that Heritage Financial institution NEVER RECEIVED, nor is the Board conscious of any order from the Excessive Courtroom (or some other courtroom for that matter) for disclosures relating to any contract involving Mr Seidu Agongo. Certainly, we’re listening to of this matter for the VERY FIRST TIME by means of the Governor’s information convention. In any case, we’re unable to fathom why the Excessive Courtroom would order Heritage Financial institution to make disclosures in respect of a contract that it is not a celebration to or a custodian of.
Moreover, it is much more puzzling that the Financial institution of Ghana would declare it has no information of Mr Seidu Agongo being a shareholder of Sarago Restricted. The shareholding construction of Sarago Restricted is a matter of public document because it is a registered firm on the Registrar-Basic’s Division. Extra importantly, the Financial institution of Ghana, in its personal provisional licence to Heritage Financial institution, said as a situation that the focus of HBL’s shareholding in Mr Seidu Agongo and Sarago Restricted be diluted inside three years of the graduation of operations. Mr Agongo’s affiliation with Sarago Restricted was, thus, recognized to the Financial institution of Ghana on the time of the licensing.
On the difficulty of the switch of an quantity of GHS15.8m and the acquisition of some properties owned by the primary shareholder which have been said within the Monetary Statements of 2017, will probably be deceptive on the a part of Financial institution of Ghana to declare that the financial institution and its shareholders, administrators and administration have failed to make clear issues. The data on the financial institution are very clear on these transactions and will have been very simply verified by the Banking Supervision Division if, certainly, that they had any points with the figures.
Moreover, the Financial institution of Ghana, by means of the Banking Supervision Division WAS NOTIFIED IN WRITING about these entries. A Sale and Buy Settlement masking the acquisition of the buildings, along with copies of the Valuation Studies from a reliable property valuation agency have been all duly forwarded to the Financial institution of Ghana. From the paperwork referred to above, there is, thus, no foundation for any doubts concerning the identify of the shareholder whose property was being acquired.
The valuation reviews from the skilled valuers additionally do give the idea of the valuation; and do, certainly, set up the idea for the costs agreed and captured within the Sale and Buy Settlement that was executed between the 2 events within the transaction. Even disregarding the correspondence despatched to the BOG on this matter, A TEAM FROM THE BANKING SUPERVISION DEPARTMENT of the Financial institution of Ghana did perform an onsite inspection in July 2018 (final yr).
This staff did have all paperwork made out there to them and did categorical satisfaction with the reasons that got them by administration. Every thing concerning the transaction was, thus, completely above board and made obtainable to the Financial institution of Ghana.
(three) The grounds for the revocation of HBL’s licence additionally included a declare that the financial institution had accredited ‘several related-party transactions’, that is loans and amenities to its most important shareholder. Three corporations have been cited within the Governor’s assertion:
SASSH ALLIANCE: Heritage Financial institution gave amenities totalling GHS6m; an Overdraft of GHS3m, and a Financial institution Assure of GHS3m, which have been absolutely collateralised, have been subjected to the usual credit score necessities and have been duly accepted by the Board in accordance with S.67 of Act 930. These are the one transactions with SASSH ALLIANCE.
MOOR COMPANY LIMITED: The corporate had a car leasing contract with Heritage Financial institution by which it offered the financial institution with its automobiles. This contract was terminated when the financial institution bought the automobiles.
KEDGE COMPANY LIMITED: The corporate rents out properties to a few of Heritage Financial institution’s branches.
All of the above transactions have been dealt with in a clear method and at arm’s size. Aside from the credit score facility to Sassh Alliance, Heritage Financial institution has no publicity to any of the businesses talked about.
(four) The numerous shareholder was not match and correct
It is not clear to us how the Financial institution of Ghana got here to this conclusion, however this is a matter clearly greatest handled by the stated shareholder in any method that he shall deem applicable. Suffice it to say solely that neither the financial institution nor its administrators or shareholders have been afforded the statutory discover interval by the Financial institution of Ghana, inside which to have responded to the allegations made prior to the abrupt revocation its licence, opposite to the provisions of the exact same regulation underneath which the licence was revoked.
As a Board, we had engaged with the Financial institution of Ghana together with the Governors on quite a few events, ALL in relation to assembly the capital requirement, and at no time had the problems now being given as grounds for the revocation of the financial institution’s licence been raised. Certainly, as lately as December 24, 2018, the Financial institution of Ghana had given Heritage Financial institution clearance for a possible investor who had introduced proof of funds to switch the cash. We had thought-about and utilized for consideration beneath the Ghana Amalgamated Belief scheme and had acquired constructive alerts. We have been actually in dialog with our potential investor when the financial institution was summoned at about 12 p.m. to a gathering at 2 p.m. and handed a letter revoking the financial institution’s licence.
Heritage Financial institution was by the Financial institution of Ghana’s personal admission, a solvent financial institution. It NEVER acquired liquidity help from the Financial institution of Ghana. Its company governance report had by no means been impugned by the Financial institution of Ghana. We consider we now have been completed a grave injustice and a horrible precedent set that doesn’t bode properly for the longer term. We’ve dealt herein solely with issues affecting the Board’s obligations that wanted to be clarified to set the document straight, and this, with out prejudice to no matter authorized choices the shareholders might need to avail themselves of so as to get justice for the even higher hurt completed to them.
ISSUED BY THE ERSTWHILE BOARD OF HERITAGE BANK LIMITED.
You possibly can’t blame us – Deputy BoG governor tells Menzgold clients
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