Failed Banks’ Directors To Be ‘Prosecuted’ – President Nana Addo

President Akufo-Addo has given an assurance that there will soon be prosecution of all those found culpable in the collapse of some private banks that put the banking sector and the entire economy on the brink of collapse.

“No one found complicit will be spared,” he said at the media encounter in Accra on Wednesday evening.

Former managing directors of the defunct banks and top directors, including Dr. Kwabena Duffuor II, uniBank; Johan Rheeder, Sovereign Bank; Mike Nyinaku, Beige Bank; Osei Asafo, Royal Bank and Pastor Mensa Otabil of the defunct Capital Bank, among others, are all under investigations for the roles they played in the collapse of the banks.

Some of the directors, including William Ato Essien of Capital Bank, have been accused of diverting funds from their banks and undertaking insider trading to deny the respective banks of the needed funds to operate.

In August, 2017, the Bank of Ghana (BoG) closed down two indigenous banks, namely UT Bank and Capital because they were said to be under capitalised and beyond rehabilitation.

BoG subsequently appointed the Ghana Commercial Bank (GCB) to take over the two banks, and in August 2018, five additional banks, namely Royal Bank, Sovereign Bank, Beige Bank, uniBank and Construction were merged into an entity known as the Consolidated Bank of Ghana Limited due to capital inadequacy as reported by the Central Bank.

Some of the collapsed banks were said to have acquired their operating licences through fraudulent means.

Cost Of Failure

President Akufo-Addo told journalists that “there is no doubt that the failure of the seven banks came at a cost to the Ghanaian taxpayer and staff of the affected banks.”

He, however, stated that the decisions taken by the Bank of Ghana and the financial support government provided through the establishment and funding of Consolidated Bank Ghana Limited ensured that deposits of more than 1.5 million customers with deposit values of over GH¢10 billion and about 70 per cent of the 5,000 jobs in the affected banks were saved.

“This was important to alleviate the severe adverse outcomes that could have occurred. It is important that the costs of these interventions, which were borne by taxpayers, are recovered to the extent possible through recoveries from debtors, shareholders and related and connected parties who took money from the defunct banks,” he explained.

The President said that “the receivership processes are ongoing, and the receivers are making great strides in their recovery efforts, amounts in excess of GH¢400 million have so far been recovered by the Receivers of the two banks closed last year.”


President Akufo-Addo said a Special Investigations Team (SIT) has been put in place to undertake criminal investigations into the failure of all the seven banks.

He said the failed banks allegedly misapplied the taxpayers’ liquidity support instead of channelling the government’s facility to revive the dwindling fortunes of the banks.

“The Bank of Ghana is conducting its own internal investigations into the conduct of its officials (past and present) that could have facilitated wrongdoing at these banks,” he added.

President Akufo-Addo said that his administration inherited a financial system that was under a considerable state of distress with banks that were known to be insolvent as far back as 2015 and banks that had been licensed without the requisite capital required.

Some of these banks, he said, were surviving day-to-day only by virtue of liquidity support from the Bank of Ghana with the underlying problems that plagued them remaining unresolved.

“To protect depositors’ funds, as well as prevent contagion from these failed banks to the rest of the financial system, the new administration of the Bank of Ghana took some courageous measures in the public interest to clean up the banking system and to put it on a stronger and more resilient path,” he said.

He said the recapitalisation efforts by banks have been very successful so far, with about 22 banks already meeting the new minimum capital of GH¢400 million well in advance of the 31st December deadline.

“The 22 banks that have met the new requirement include a good number of indigenous banks, while a few others are in the final stages of meeting this requirement.

“I am confident that at the end of the exercise, we will have a stronger, more resilient banking sector with a strong indigenous presence, well positioned to finance the next phase of our agenda of economic growth,” President Akufo-Addo added.

He said he was determined to lead a government that would build “stronger and more resilient banking sector.”

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