BoG has done a ‘grave injustice’ to Heritage Bank by revoking its license – Former directors

The former Board of Directors of now defunct Heritage Bank Limited (HBL), has lamented claims by the Bank of Ghana (BoG) that it set up the bank with suspicious capital and that the central bank has done them a ‘grave injustice’ by revoking its license.

Last week, the Bank of Ghana (BoG) after a news conference on the completion of the banking sector reforms, revoked the license of Heritage Bank, stating that the bank had a questionable stated capital aside their inability to meet the new 400 million minimum capital requirement.

Governor of the BoG, Dr. Ernest Addison also mentioned that the promoters of Heritage bank provided evidence to Bank of Ghana at the time of the application for a banking licence to the effect that an amount totaling GHC 120.6 million was lodged with a local bank.

“The amount of GHC 120 million was transferred to the bank from Agricult, a company wholly owned by Seidu Agongo, a promoter of Heritage, which funds appear to have been derived from contracts awarded to Mr. Agongo by COCOBOD, and are currently the basis of criminal prosecution in the High Court of Ghana”.

Dr. Addison stated that certain shares of the bank were held by nominee shareholders whose ultimate beneficial shareholders were not disclosed to the Bank of Ghana. He said the shareholder on record for Sarago is one Ruth Leena Abazerri, although the Bank of Ghana has reasonable grounds to believe that it is owned by Seidu Agongo.

But in a statement sighted by on Tuesday, the former directors of Heritage Bank said the claims by the Central Bank were either “completely false or inaccurate”.

According to them, the central bank failed to adequately provide them with the necessary assistance after several engagements, adding that the action by the BoG is “a terrible precedent that does not bode well for the future.”

“Heritage Bank was by the Bank of Ghana’s own admission a solvent bank. It never received liquidity support from the Bank of Ghana. Its corporate governance record had never been impugned by the Bank of Ghana. We believe we have been done a grave injustice and a terrible precedent set that does not bode well for the future. We have dealt herein only with matters affecting the Board’s responsibilities that needed to be clarified to set the record straight, and this, without prejudice to whatever legal options the shareholders may wish to avail themselves of in order to get justice for the even greater harm done to them.”

“As a Board, we had engaged with the Bank of Ghana including the Governors on numerous occasions ALL in relation to meeting the capital requirement, and at no time had the issues now being given as grounds for the revocation of the bank’s license been raised. Indeed as recently as December 24, 2018 the Bank of Ghana had given Heritage Bank clearance for a potential investor who had brought proof of funds to transfer the money. We had considered and applied for consideration under the Ghana Amalgamated Trust scheme and had received positive signals. We were literally in conversation with our prospective investor when the bank was summoned at about 12pm to a meeting at 2pm and handed a letter revoking the bank’s license.

Responding to claims by the Governor of the Central Bank that, the involvement of the bank’s majority shareholder, Mr. Seidu Agongo in the ongoing alleged fraudulent Cocobod fertilizer contract trial, means he’s unfit to hold a banking license, the former directors stated that those assertions are even questionable.

“We find it puzzling that the Bank of Ghana should now be disputing the existence of a contract between HBL’s main shareholder and COCOBOD, when the Bank, as part of its due diligence ahead of the granting of HBL’s provisional banking license had requested and received confirmation from COCOBOD of the existence of the contractual arrangements between the COCOBOD and the said shareholder.”

“We also want to state on record that Heritage Bank never received, nor is the Board aware of any order from the High Court (or any other court for that matter) for disclosures relating to any contract involving Mr Seidu Agongo. Indeed, we are hearing of this matter for the very first time through the Governor’s news conference. In any case, we are unable to fathom why the High Court would order Heritage Bank to make disclosures in respect of a contract that it is not a party to, or a custodian of”, the statement added.


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