The Chief Executive officer (CEO) of the defunct Capital Bank, William Ato Essien, has told an Accra High Court trying him and others that his bank acquired the GH?620 million liquidity support from the Bank of Ghana with a security guarantee.
He told the court, presided over by Justice Eric Kyei Baffour on Thursday that, his fact of claim is contained in a letter written by the Bank of Ghana approving the liquidity support, which also had the terms and condition of the support being granted to Capital Bank.
Mr Ato Essien said this through his Counsel, Mr Thaddeus Sory, while cross-examining the seventh prosecution (PW7), Chief Superintendent Joseph Oppong, who happens to be the investigator in the matter before the trial judge.
Mr Sory indicated to the court that the essence of the security was to provide Bank of Ghana with assurance that in case of any default by Capital Bank, the Apex bank can fall on such security.
Although Chief Superintendent Oppong stated to the court that he had no knowledge of the reason behind the security, Mr Sory insisted that the essence of the security was to secure the liquidity support being granted to the Capital Bank.
Mr Sory even added that at the time Capital Bank collapsed, the investigator acknowledged that the defunct bank had paid GHC10 million out of the GHC620 million support it got from Bank of Ghana.
This, PW7 said, was true and the Counsel for Mr Ato Essien was quick to add that in essence, Bank of Ghana granted Capital Bank a loan.
The following are some questions (Q) and answers (A);
Q: Kindly give your full name to the Court?
A: My name is Joseph Oppong?
Q: What work do you do?
A: I am a Police Officer
Q: What is your rank?
A: I am Chief Superintendent of Police.
Q: How long have you been a Police Officer?
A: I have served the Ghana Police for thirty-one (31) years.
Q: On 14th January, 2020 you signed a witness statement which has been filed in this Court, can you have a look at this document and tell the Court whether this is your witness statement?
A: My Lord that is it.
Q: My Lord, the witness will rely on his witness statement as his evidence in chief, together with the documents attached.
All Accused Counsel: No objection.
By Court: In the absence of any objection, the witness statement of PW7 Chef Superintendent of Police, Joseph Oppong, is admitted and placed on record as his evidence-in-chief. Also placed on record are all the documents that were admitted and marked as exhibits during the Case Management Conference.
Cross examination of PW7 by Counsel for 1st Accused
Q: Mr Oppong, how long have you been with the special investigation team?
A: My Lord, for one and half years
Q: And as part of your investigations, you have stated in your witness statement that the Bank of Ghana granted liquidity support to Capital Bank to the tune of GHC620 million?
A: Yes, my lord.
Q: Can you also confirm to this Court that this liquidity support granted to Capital Bank was based on a request made by Capital Bank to Bank of Ghana?
A: My Lord, yes.
Q: The support that the Capital Bank requested from Bank of Ghana was to help Capital Bank to temporarily manage a liquidity shortfall, which had arisen out of an investment made by Capital Bank?
A: Yes, my Lord.
Q: In your witness statement you testified that the liquidity support was done by Management of the Capital Bank. Can you confirm that?
A: That is so, my Lord.
Q: Bank of Ghana after considering the application made by Capital Bank approved the liquidity support and agreed on the terms of the support. You can confirm that one as well to this Court?
A: My Lord, that is correct.
Q: The letter written by the Bank of Ghana confirming the approval of the liquidity support also contained the terms and conditions of the support being granted to Capital Bank. Can you confirm that to the Court as well?
A: My Lord, that is correct.
Q: This liquidity support that was granted to Capital Bank in the approval letter was to be paid back by Capital Bank. Can you confirm that to the Court as well?
A: My Lord, that is also correct.
Q: The letter written by the Bank of Ghana approving the liquidity support also stated that the Capital Bank was to provide security for the support that was been given to Capital Bank.
A: That is so, my Lord.
Q: The essence of this security, which was to be provided by the Capital Bank, was to secure the support being given to the Capital Bank, so that in an event where Capital Bank is unable to pay for the support, Bank of Ghana can fall on such security. Can you confirm that to this Court as well?
A: I do not know the reason behind the security.
Q: I’m putting it to you that the essence of the security was to secure the liquidity support being granted to the Capital Bank, so that in the event where Capital Bank is unable to pay back the support, the Bank of Ghana can fall on such security?
A: My Lord, I’m not a Banker and I do not know the reason for the security.
Q: In your witness statement, you told this Court that if the time of the collapse of Capital Bank, Capital Bank had paid an amount of GHC10 Million out of the GHC620 Million support?
A: My Lord that is so.
Q: In essence, Bank of Ghana granted Capital Bank a loan?
A: My Lord that is so.
Q: Again, as part of the case of the prosecution, it is alleged that sometime in 2015, Pronto Constructions and Supplies Limited approached All Time Capital Limited to help Pronto Constructions and Supplies Limited raise some money. Is that correct?
A: As part of my investigations I got to know that part of the liquidity support went to Pronto Construction and Supplies Limited, but I do not know who approached who.
Q: Take a look at your Exhibit “LLLL”, page 11. Can you read the first four lines to this Court?
A: Investigation further reveal “….”
Q: So, can you confirm to this Court that sometime in 2015 Pronto Constructions and Supplies Limited approached All Time Capital Limited to help Pronto Constructions and Supplies Limited raise some money?
A: My Lord that is so.
Q: It is also the case of the Prosecution that the capital, which was to be raised for and on behalf’ of Pronto Constructions and Supplies Limited was to enable the company undertake some construction works. Can you confirm that to this Court?
A: My Lord that is so.
Q: And so, a letter of engagement was signed between All Time Capital Limited and Pronto Constructions Limited on the 14th day of August, 2015. Can you also confirms that to this Court?
A: My Lord that is so.
Q: It is again the case of the Prosecution that All The Capital Limited after being engaged by Pronto Constructions and Supplies Limited approached Capital Bank to invest in Promo Constructions Limited by way of purchasing a commercial paper, Can you confirm that a well?
A: My Lord, I can confirm that but further investigations revealed that no such construction was undertaken.
Q: After the initial discussion between All Time Capital Limited and Pronto Constructions Limited and Capital Bank, a non-disclosure agreement was signed between Pronto Constructions and Supplies Limited as issuers of the commercial paper, First Capital Plus Bank as the Investor, and All time Capital Limited, as the arranger. Can confirm that to the Court?
A: My Lord that was done.
Q: The decision to invest in Pronto Constructions and Supplies Limited was taken by the Management of Capital Bank, as your investigations revealed?
A: My Lord that is correct.
Q: And so, the management of Capital Bank approved the decision to invest in Pronto Constructions and Supplies Limited, as your investigations revealed?
A: My lord that is so.
Q: It is the case of the Prosecution that MC Management Limited also approached All Time Capital Limited to raise capital on behalf of MC Management. Can you confirm that to this Court?
A: My Lord, that is correct.
Q: The raising of the capital was to aid MC Management Limited to undertake some projects, as your investigations revealed.
A: My Lord, I do not know about any such projects.
Q: I’m punting it to you that the essence of MC Management raising such capital was to enable MC Management undertake some projects?
A: My Lord, MC Management raised the capital for the formation of Sovereign Bank.
Q: Can you confirm to this Court, if a letter of engagement was signed between All Time Capital Limited and MC Management Limited?
A: My Lord, it has been some time, unless I refresh my mind.
Q: I’m putting it to you that on the 28th day of July, 2015, a letter of engagement was signed between All Time Capital Limited and MC Management Limited?
A: There may be such a letter, my Lord.
Q: And so, after the initial discussions between MC Management Limited, All Time Capital Limited and First Capital Plus Bank Limited, a non-disclosure agreement dated the 13th day of October, 2015 was executed between the parties?
A: Yes, there may be such agreement.
Q: It is the case of the Prosecution that a total amount of GHC58, 800, 000 was paid to MC Management Limited, as the issuer of the commercial paper, First Capital Plus Bank as the investor with All Time Capital Limited as the arranger. Can you confirm that to this Court?
A: My Lord, yes,
Q: Your investigations also revealed that the investment by Capital Bank with respect to MC Management was also approved by the Management of Capital Bank?
A: The Managing Director of Capital Bank denied that agreement, he never signed such agreement with MC Management Limited.
Q: During your investigation, you came across memos, which were generated internally by Capital Bank, in respect of investment with MC Management. That is correct?
A: Indeed, that is correct.
Q: It is the case of the prosecution that GHC27.5 million out of the liquidity support, which was granted by Bank of Ghana to Capital Bank was paid to 1st accused person as business promotion. That is correct?
A: My lord that is correct.
Q: Your investigations revealed that before the payment of GHC27.5 million to the 1st accused person as business promotion, memos were generated approving such payments. You can confirm this to the court?
A: My lord that is correct.
Q: Are you aware that the collapse of Capital Bank and the appointment of a Receiver, the Receiver had instituted a civil action here in the High Court to recover the said liquidity support that was granted to Capital Bank?
A: My lord. I’m aware of it.
Counsel for 1st Accused: My lord that is all for this witness
Cross examination of PW7 by Counsel for 3rd accused
Q: Mr Joseph Oppong, what is your level of education?
A: My lord, I’m a Masters’ degree holder
Q: In what field?
A: My lord, in Development Studies
Q: And what is your level of education in the banking sector?
A: I don’t have any education in the banking sector.
Q: Have you heard the term “business promotion” before?
A: My lord, I heard the term during investigations.
Q: During your investigations, you would agree with that the term “business promotion” is a normal business transaction in the banking sector?
A: As I said, I only heard it during my investigations, as to whether it is normal in the banking sector, I’m not aware.
Q: Did you bother to check as to whether business promotion is a normal business transaction from the Bank of Ghana or the banking sector. Did you?
A: My checks revealed that some banks accept the business promotion, others do not
Q: You interviewed one Mr Emmanuel Kontoh Arthur during your investigations?
A: My lord, I did.
Q: And he works in the banking sector, is that not so?
A: My Lord that is so.
Q: He was called as a witness in this matter, are you aware of that?
A: I obtained statement from him as part of my investigations, but I’m not aware whether he has been called as a witness in this matter.
Q: Look at Exhibit “N’ and ‘P’, those were memos generated by Mr Emmanuel Kantoh who you interviewed during your investigation process. You would agree with me?
A: My Lord that is so.
Q: You would agree with me that those memos were for business promotions.
A: My Lord, those were the headings of the memos.
Q: Did you bother question him on those memos?
A: My Lord, I did.
Q: I put it to you that Mr Emmanuel Kontoh, who generated these memos, came to this Court to say that those were normal business transactions in their sector?
A: My Lord, if he did that is his opinion.
Q: I put it to you again that, as you earlier stated that business promotion is a normal business transaction in some banks, so it is in Capital Bank, as per your own testimony to this Court?
A: My Lord, my investigation did not reveal that business promotion is normal in Capital Bank.
Q: You interviewed Mr AseyeAkortia, is that not so?
A: My lord, yes I did.
Q: Did you interview Mr Michael Amoako?
A: Yes, I did.
Q: He works with the banking supervision of the Bank of Ghana, is that correct?
A: That is correct.
Q: He is a certified banker, which you are not?
A: I don’t know that.
Q: Take a look at Mr Kwame A. witness statement. Can you read paragraph 18 of his witness statement?
A: Reading […_
Q: Please can you read paragraph 19 of that document?
A: Reading […]
Q: This was after the appointment of the Receiver. Is that not so?
A: I cannot tell the difference in the dates. I’m not aware of the date the Receiver was appointed.
Q: Read paragraph ‘5’ of your witness statement?
A: So that is correct.
Q: So you would agree with that it was before the director of the Bank of Ghana in August 2019?
A: My lord, that is correct.
Q: You interviewed Mr AseyeAkrotia who gave testimony about commercial paper. Is that not so?
- My lord, I cannot recollect whether he told me about commercial papers.
Q: Based on your testimony, you interviewed the 3rd accused on commercial paper. Is that not so?
A: My lord I interviewed the 3rd accused but I cannot tell whether it was on commercial papers.
Q: Do you remember Mr AseyeAkortia?
A: my lord, I remember him.
Q: Based on the testimony of the 3rd accused and Mr AseyeAkortia, you caused a forensic report to be drawn. Is that not so?
A: My lord that is so.
Q: You categorically stated at paragraph 2 of page 17 of your investigation report that …. Is that not so?
A: My lord that is so.
Q: Have a look at this document, can you tell the court what document you are holding?
A: Yes, my lord.
Q: Can you humbly tell the court what document you are holding?
A: My lord that is the forensic report.
Q: The document was generated by you?
A: That is so my lord.
Counsel wants the document tendered and without any objections, the court allows it into evidence.
Q: Please can you read the handwritten minutes dated the 18th of December, 2011 to the Court?
A: This is the minutes of the chairman of the committee […]
Q: This was an instruction to you by your superior, is that not so?
A: My Lord that is so.
Q: And this instruction came before the Bank of Ghana directive to the banks. You would agree with me?
A: My Lord, considering the two dates, that so.
Q: Please look of your page 16 of your investigation report. Please read the concluding past of the first paragraph?
A: Reading […]
Q: Look at Exhibit ‘VVV1’ attached to his VishAshiagbor. Can yon see the document shown to you?
A: Yes my lord.
Q: Can you tell the Court the document shown you?
A: My Lord, it is a Nordes Capital Investment Certificates
Q: So you would agree with me that certificates were duly issued for the investment placed with Nordes Capital.
A: My lord, yes.
Q: I put it to you that, your statement at paragraph 16 of your investigation report of no certificate issued is untrue?
A: My lord, Nordes Capital Investment is not the only investment made by Capital Bank.
Q: But as we are in this Court, you would agree with me that Nordes Capital issued an investment certificate, yes or no?
A: My Lord, yes.
Counsel for 3rd accused: That will be all.
Case adjourned to April 22, 2021
The post Capital Bank had security for its GH¢620M liquidity support –Ato Essien appeared first on The Chronicle Online.
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