Private legal practitioner Ace Anan Ankomah has disclosed that an investigative report on the recent collapse of banks implicates some former leaders of the Bank of Ghana who contributed in irregularities.
Mr. Ankomah stated that the former leaders approved billions of cedis in liquidity support for banks without security as they themselves benefited from the funds.
Speaking at a forum organized by the Institute of Internal Auditors, Ghana, Mr. Ankomah questioned why the laws of the land have still not being applied in dealing with former staff of the Bank of Ghana who contributed to the collapse of banks.
Reacting to a question on the Banking Act, Act 673, Mr. Ankomah stated that the law gave the central bank powers to demand security before liquidity support is approved.
He explained that Act 930 which is an amendment to Act 673 just gave the former more clarity.
He argued that “Bank of Ghana even under 673 could not give liquidity support without security yet liquidity was given out without the agreements being signed or security asked for”.
“The thing about Act 930 was that it was specifically drafted to address the problem we are facing now. So it looks in shape. What has changed? It is leadership that has changed. Because for the life of Act 930 until the change of government, no provision in it was still not enforced,” he said.
Mr. Ankomah stated that the situation got so bad such that the Bank of Ghana became an institution that was used to misappropriate billions of tax payers monies
“When a bank is broke they just go to Bank of Ghana and they write them a cheque. Billions of tax payers money was used to support banks. And what were they doing with the money. Buying houses and cars. We have all seen the audited report”
Ghana’s banking crisis’
Ghana’s banking sector faced challenges over the collapse of seven local banks within one year.
The banks are UT and Capital Bank, both of which have been taken over by the state-owned GCB Bank.
The others are Beige Bank, Sovereign Bank, Construction Bank, uniBank, and Royal Bank, all of which have been consolidated into Consolidated Bank of Ghana.
The decision to collapse all the banks were primarily because they had all become highly insolvent as a result of various reasons including poor corporate governance decisions.
The receiver of uniBank, Beige Bank, Sovereign Bank, Construction Bank, Royal Bank, recently sued all 17 shareholders of uniBank over the repayment of a GHC 5.7 billion debt.
The GHC 5.7 billion debt, according to the receiver, was left by the shareholders.
By: Lawrence Segbefia/citibusinessnews.com/Ghana