Directors of defunct UT, Capital banks to appear before EOCO | Ghana Business & Finance Magazine

The Finance Minister Ken Ofori-Atta has said he supports any move by the Central bank to go after the directors of defunct UT and Capital Banks.

He said the move is in line with the banking act.

“The Act states clearly that the directors who are culpable will be pursued so we will certainly go after them,” he told Joy News.

Mr Ofori-Atta said regarding prosecution, he believes the Bank of Ghana (BoG) has an incredibly strong team to take care of such issues if that becomes a possibility.

“There is a new spirit and energy there to clean the banking system as well as the zeal to do the right thing. I really applaud their courage and professionalism that we are seeing,” he said.

The Economic and Organised Crime Office (EOCO) has summoned the directors of the collapsed UT and Capital banks to answer questions on their roles in the collapse of the two banks.

The Daily Graphic reports that the directors of UT Bank will appear before the acting Executive Director of EOCO at 9:30 a.m. on Wednesday, while the directors of Capital Bank are to appear on April 4, 2018.

The BoG, in August last year, revoked the licences of UT Bank and Capital Bank due to severe impairment of their capital.

The central bank has approved a purchase and assumption transaction with the GCB Bank Ltd that transfers all deposits and selected assets of UT and Capital banks to the GCB Bank Ltd.

The liabilities of the two banks, according to the central bank, overwhelmed their assets, leaving the BoG with no option but to undertake a purchase and assumption transaction as the least costly method of dealing with a collapse.

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The banks were “unable to develop an acceptable plan”, according to the BoG, although it made efforts to help both banks to recover through private alternatives.

However, the owners and managers of the UT and Capital banks were unable to increase the capital of the banks to address the insolvency.

An investigative report revealed, among other key findings, that the two liquidated banks were run by owner chief executives, with complete disregard for internal rules and banking regulations.

The directors of two banks would be made to answer questions on how they singularly made decisions on credit extension and breached all the rules regarding related party transactions and connected lending.

Meanwhile, Chairman of the Finance Committee of Parliament Mark Assibey-Yeboah has called for the arrest of the directors after the damning findings.

Source: Joy Business

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