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Parliament C’ttee to probe collapse of 7 banks

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The Finance Committee of Parliament has scheduled a three-day hearing to probe the collapse of seven local banks in the last twelve months.

“The committee has decided to hold hearings on the 5th to 7th September on the collapse of the banks here in Parliament,” the Chairman of the Finance Committee, Dr. Mark Assibey Yeboah told the press on Wednesday.

Dr. Assibey Yeboah was speaking after a committee meeting where he said the committee “agreed on the mode of hearings, who to invite and all other matters.”

He said the committee was now going to write to the Bank of Ghana (BoG) for documentation which will be assessed on August 30.

“We need documentation to form our opinions on what to do… we cannot work without official documentation,” he explained.

Representatives from the BoG, Consolidated Bank, KPMG, PwC and the Ministry of Finance are expected to appear before the hearing.

The owners and directors of the seven banks that have collapsed, some under controversial circumstances, will not be invited, according to Dr. Osseiy Assibey.

“We are seeking information. We are not an investigative body, so to speak. We don’t have prosecutorial powers,” he noted,

The legislator said the state of the economy was the committee’s main concern.

“We are concerned with the economy generally so if banks collapsed and if the Ministry of Finance is setting up a bank and are doling out GHc8 billion, don’t you think we should be concerned?”

Contradictions over in-camera hearing 

There appears to be some confusion from key members of the committee on whether the hearings will be made public.

Dr. Assibey Yeboah said a decision has not yet been taken.

“If the committee so decides, I don’t have any problem with that. I don’t decide for a 25 member committee. There are members in there so all of us will reach a conclusion.”

But also speaking to the press on Wednesday, a Ranking Member of the Committee, Cassiel Ato Forson, was definite that the hearings will be private.

He explained that this was due to the sensitivity of the matter.

“We’ve come to the conclusion that considering what we call the sensitivity of the matter, parliament committee of Finance will meet in-camera to look at this matter.”

“It is important for the people appearing before the committee to be at ease and to give us the needed answers,” Mr. Ato Forson said.

The Governor said the five had therefore been collapsed into a new bank; the Consolidated Bank of Ghana and deposits of the collapsed banks had been transferred to the Consolidated Bank.

This was after UT and Capital Banks, which collapsed first, were taken over by GCB on the instructions of the Bank of Ghana.

The Governor, Dr. Ernest Addison, said some of the five newly collapsed banks had committed various offenses against the country’s banking laws including obtaining their licenses through false pretenses.

The governor said the five had therefore been collapsed into a new bank; the Consolidated Bank of Ghana and deposits of the collapsed banks had been transferred to the Consolidated Bank.

The banks collapsed despite the fact that the Bank of Ghana had supported them with hundreds of millions of cedis to enable them to recover from distress.

Their collapse has however resulted in the state incurring more cost in fixing the mess created.

This has increased public agitation as some of those said to be complicit in the mismanagement of the banks misapplied the funds leading to the eventual collapse.

By: Duke Mensah

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