No future role for directors, shareholders of collapsed banks – BoG

The Bank of Ghana (BoG) has stated that directors and shareholders of the five collapsed banks will be stripped of any future role in the banking sector once they are found guilty by a court of competent jurisdiction.

Many officials of the collapsed banks who are currently facing interrogation by the Economic and Organised Crime Office (EOCO) are battling a career-threatening charge to absolve themselves of any wrongdoing.

A highly place source at the BoG told the Daily Graphic in an interview that the central bank would enforce to the letter the Banking Act, 2004, Act 673, which spells out sanctions for directors of banks who are implicated in any act of insolvency or folding up of their banks.

Quoting the relevant law to back the point, the source said the reports of the directors and senior managers of the collapsed banks had been sent to EOCO.

“Nobody will be spared; once found guilty by a court, their careers in the banking industry in the country are ended,” it said.

The BoG last week revoked the licences of five universal banks and subsequently merged them into a new bank – Consolidated Bank Ghana Limited – to be headed by Mr Nii Amanor Dodoo of KPMG.

The entities – the uniBank, the Royal Bank, the Sovereign Bank, the Construction Bank and the BEIGE Bank – were found to have committed various regulatory and financial breaches that made them insolvent and unfit to continue operations.

At a press conference in Accra, the Governor of the BoG, Dr Ernest Addison, said the Consolidated Bank was established by the government and issued a licence to operate on August 1, 2018.

Fit and proper

According to the source, the central bank was currently applying its Fit and Proper guidelines which could affect some of those officials and top management staff of the collapsed banks.

“We have come to a point where we have to enforce the rules very strictly, without fear or favour, to restore sanity to the banking sector,” the source added.

The latest guideline to be issued by the BoG for the banking sector, aside from two others, in less than a month is the Fit and Proper Directive.

Among others, the directive sets the framework which helps in determining whether a person is fit to be a director or a significant shareholder or to holder a key management position within an organisation.

Experts hail move

The move by the central bank to revoke the licences of the insolvent banks was widely commended by financial analysts who said it was timely.

Dr Sam Ankrah, an international investment and financial expert; Mr Ken Thompson, the Mangaging Director of Dalex Finance, and Mr Sidney Casely-Hayford, a chartered accountant and member of Occupy Ghana, a local pressure group, have all hailed the move by the BoG and expressed the desire for swift action to be taken on the directors of the now defunct banks.

Although some of the directors of the collapsed banks have denied any complicity in the collapse of their financial entities, they plan to make their case to the state investigative body, EOCO.

Last-minute attempt

Some of the directors of the five collapsed banks had, at the 11th hour on Tuesday, July 31, 2018, prior to the BoG’s news conference on Wednesday, August 1, 2018, presented a petition to the central bank, indicating their readiness to meet all their obligations to the bank in good time.

One of the directors who spoke to the Daily Graphic on condition of anonymity said: “It’s not over yet; we are still making our case, this is because the central bank is getting tougher with its rules governing the financial sector.”