The Commercial Division of the Accra High Court has been told that the Founder and Chief Executive Officer (CEO) of defunct Capital Bank, William Ato Essien, did not disclose information on the placements of GH¢130 million to All Times Capital and Norde Capital respectively.
Mr. Essien was alleged to have told the management of Capital Bank at a meeting that the details of the millions of cedis placements to the two firms were highly classified information, hence, the nondisclosure.
The court, presided over by a Court of Appeal Justice with the additional responsibility of the High Court, Eric Kyei Baffour, was informed last week Thursday that although Ato Essien failed to disclose any information on the placements, he, nonetheless, promised to repay the money by March 21, 2016.
Ato Essien, the first accused person (A1), is standing trial with two others – Dr. Tetteh Nettey (A2), an alleged Co-Owner of MC Management Services Limited, and Rev. Fitzgerald Odonkoh (A3), former Managing Director of the defunct Capital Bank – on 23 counts, including stealing and money laundering.
The three have pleaded not guilty to the chargers for their various roles in alleged misappropriating some GH¢130 million of the GH¢650 million liquidity support given to Capital Bank by the Bank of Ghana (BoG).
Ato Essien has also been accused of requesting and receiving GH¢27.5 million of the GH¢650 million as business promotion or commission for his role as the facilitator for the approval of the liquidity support from the Central Bank.
Ato Essien has put up a spirited defence that the GH¢27.5 million was a “finder’s fee” at a time he said Capital Bank was insolvent and was struggling to pay depositors their funds.
Fitzgerald Odonkoh, while being cross-examined by the Chief State Attorney, Marina Appiah Opare, said Ato Essien urged the management to factor in his request for the commission, as he arranged for the liquidity support from the BoG after Capital Bank, on its own, failed to access the support. And, that it took three different Board meetings held on October 3, 2014, April 4, 2016, and October 16, 2016, to approve the GH¢27.5 million business promotion.
The former MD of the defunct Capital Bank stated that the Board Chair gave his approval of the GH¢29 million for Ato Essien on phone, and that at the time, the payment of business promotion was a normal banking practice.
But, the prosecution was of a different opinion – that Ato Essien could not have arranged for the liquidity support of his personal accord when all of the three different letters that Capital Bank wrote to the BoG were signed by Rev Odonkoh.
Ms. Opare further argued that while Rev. Odonkoh was signing those letters, he had the expectation that the Central Bank would consider his (Capital Bank) application favourably and grant the request, therefore, he cannot turn round to say his former boss arranged the financial bailout by himself.
To her, Rev. Odonkoh was only running away from a responsibility that he facilitated the payment of the business promotion to Ato Essien, while knowing very well that he should not have done that.
She added that not only was Rev. Odonkoh the former Managing Director of Capital Bank, which was currently in receivership, but also a Board Member. Similarly, she added that there was no evidence or proof before the court to suggest that it was the Board that approved the payment of the business promotion to Ato Essien.
Per her argument, the Central Bank, in approving the liquidity support for Capital Bank, gave specific conditions for the grant, but Rev. Odonkoh failed in that respect by instructing the Treasury Department to raise the various memos for the payment of business promotion to Ato Essien.
The following are some questions and answers of the cross-examination:
Q. You said earlier in your testimony before this court that Capital Bank did not succeed in obtaining the liquidity support from the Bank of Ghana so it was the first accused who arranged it from the Bank. Is that not so?
A. Yes.
Q. So you mean Capital Bank made an earlier request officially to the Bank of Ghana for liquidity support before the grant of the GH¢620 million. Is that what you want the court to believe?
A. Yes. I was, however, not very directly involved in that process. At the time I was not the Managing Director.
Q. Were you a Board Member at the time?
A. Yes.
Q. Capital Bank wrote three different letters to the Bank of Ghana applying for liquidity support?
A. Yes.
Q. But you signed all these three letters to the Bank of Ghana?
A. Yes.
Q. And your expectation was that the Bank of Ghana will consider your application favourably and grant the request?
A. Yes.
Q. And, indeed, Bank of Ghana grated the application?
A. Yes.
Q. I am putting it you that A1 did not arrange for liquidity support from the Bank of Ghana?
A. No my Lord. A1 was the one who arranged for support from the Bank of Ghana and advised management to put in the request.
Q. I am putting it to you further that you are only saying this because you facilitated the payment of business promotion to him, which you know you shouldn’t have done?
A. No my Lord. It was A1 who facilitated the approval of the liquidity support [and] requested for the payment of the business promotion.
Q. You said there was a Board Sub-Committee that met regularly to deliberate on the activities of the Bank?
A. Yes.
Q. But you, as the Managing Director, was responsible for the day-to-day running of the Bank. Is that not so?
A. Yes.
Q. You will agree with me that this Sub-Committee was not part of the management of the Bank?
A. The Sub-Committee represented both the interest of the Board and the management.
Q. It was the management of the Bank in which you were the head that was responsible for the effective utilisation of the liquidity support. Is that correct?
A. Yes.
Q. But you also said in your evidence that the decision to pay business promotion to A1 was approved by the Board of Capital Bank at its meetings?
A. Yes.
Q. So there was more than one meeting that approved the payment. That is what you want the court to believe?
A. Yes.
Q. Can you tell the court how many times the Board of Capital Bank met to deliberate on and approve the payment of business promotion?
A. From the minutes that have been submitted, there were at least 3 meetings where the issue of the business promotion payment was discussed.
Q. I am putting it to you that there were no Board decisions approving the payment of business promotion to the first accused?
A. No my Lord. The Board approved all these payments.
Q. That is why you were not able to provide a single decision of the Board approving the payment [of] business promotion to the first accused person?
A. My Lord, when we refer to the meetings that were held on 13 October 2014, April 4, 2016, and October 16, 2016, these approvals were discussed.
Q. I am putting it to you that none of the minutes that you attached to your witness statement is a Board decision that approved the payment of business promotion to the first accused?
A. No my lord. The Board approved these payments. I did not by myself pay monies for business payments.
Q. I am further putting to you then [that] the minutes that you attached to your witness statement we’re minutes of meetings that were held after the payment of business promotion were made to A1?
A. No my lord. The payments were made in tranches.
Q. In your statement to the police, you mentioned that at meetings called by the Board Chairman on February 26, 2015, and October 15, 2015, the negative effect of the payment of GH¢19 million business promotion was discussed?
A. Yes.
Q. You will agree with me that you did not provide the investigators or this court with the minutes of these meetings?
A. The minutes of these meetings are available in the minutes that have been provided to this court.
Q. I am putting it to you that you have not provided this court with the minutes of these meetings?
A. They have been provided.
Q. I am putting it to you that granted, but not admitted, that these meetings were held, they were held after the money had been paid to A1?
A. Yes, but in the case of the meeting held on October 15, 2015, the payment had not been made.
Q. You said you did not by yourself approve the payment of business promotion to A1 and you provided the memo on the payment of the business promotion?
A. Yes. There were different levels of approval for the payment of [the] business promotion.
Q. Without your approval as Managing Director, the payment to A1 could not have been made?
A. I acted on behalf of the Board, and everyone who has his signature on the memo is clothed with authority for the payment.
Q. I am putting it to you that the other signatories countersigned the memo you had signed approving the payment?
A. No my Lord. In banking practice the signature of a responsible member of a bank carries its authority.
Q. I am further putting it to you that you were the one who gave instructions to the Treasure to raise the various memos for the payment of the business promotion sum to the first accused?
A. As I have elucidated, I acted on behalf of the Board. The Treasury Department also takes full responsibility of its actions.
Q. The various statements that you gave to the police, you wrote them down yourself. Is that not so?
A. Yes.
Q. In your April 10, 2018 statement, you confirmed that you have approval for the payment of business promotion to the first accused person.
A. I acted on behalf of the Board.
Q. Look at the statement and read line 15 on the issue of the GH¢27.5 million business promotion?
A. On the issue… this was requested by Mr. Ato Essien, for which I gave approval.
Q. I am putting it to you that it was not the Board that has approval for the payment?
A. I have stated clearly in my witness statement that this payment was made with the approval of the Board.
Q. You said in your statement that the first accused made a verbal request for the payment of GH¢19 million to him as a business promotion for Nii Ashie Kotey of Ghana… and you said you informed the Board Chairman on phone?
A. Yes.
Q. You said the Board Chair gave his approval for the GH¢29 million to be given to the first accused person?
A. Yes.
Q. So you mean the Board Chairman’s approval was given to you on phone?
A. Yes.
Q. And you also said that based on this approval, you, as MD, also approved the payment of business promotion to the first accused person?
A. Yes.
Q. You actually repeated this on your charge statement – that the business promotion payment was authorised by the Board Chairman?
A. Yes.
Q. And you are aware that the Board Chairman alone does not constitute the Board of Capital Bank?
A. Yes.
Q. So he on his own could not give approval on behalf of the Bank?
A. As the Managing Director, I have direct reporting to the Board through the Board Chairman.
Q. I am putting it to you that the Board Chairman has denied giving approval for the payment of business promotion to the first accused person?
A. I am not aware of any such denial. Additionally, at the various meetings at which references were made to the payment of this business promotion in the presence of the Board Chairman, he did not deny such approval.
Q. The Bank of Ghana, in approving the liquidity support, gave Capital Bank terms for the grant of the support. Is that not so?
A. Yes.
Q. …
A. The payment of business promotion was a practice in the banking sector until it was outlawed in 2019.
Q. I am putting it to you that the payment of business promotion on liquidity support was never a banking practice as you claim?
A. The payment of business promotion in the banking sector had no exceptions that I am aware of.
Q. I am putting it to you that the liquid support from the Bank of Ghana came with specific conditions directed at you as the Managing Director?
A. The conditions were directed at the management of the institution. And. my Lord, I wish to also add that a minor condition was repayment of interest. This put an obligation on the bank to ensure the repayment of the support.
Q. I am putting it to you that the GH¢27.5 million business promotion paid to A1 did not go to Bank of Ghana officials.
A. I clearly indicated that the request that was made by the first accused for the payment of the business promotion, according to him, was for the Bank of Ghana officials and he was the one who arranged and organised approval of the support.
Q. I am putting it to you further that you knew all along that the money was for the benefit of the first accused?
A. No. I deny this emphatically.
Q. And you actually described the request from the first accused person to be paid the business promotion to Bank of Ghana officials as strange in your statement to the investigators?
A. Yes. I had just taken up this responsibility and that is why I sought approval before anything else.
Q. You said earlier in your testimony that the interest to be charged was GH¢9.4 million?
A. Yes. That was the average payment per month.
Q. And you will agree with me that the payment of GH¢27.5 million was more than the monthly obligation to be paid to the Bank of Ghana?
A. I was in no way connected with the quantum of business promotion that was requested by the first accused.
Q. Can you tell the court how you arrived at the amount of GH¢27.5 million paid to the first accused?
A. According to the first accused person, GH¢19 million was paid for the first two tranches of GH¢300 million and GH¢150 million, and GH¢8.5 million was paid for the third tranche of GH¢170 million, giving a total of GH¢27.5 million.
Q. Can you tell the court how the first accused person arrived at these amounts?
A. No, my Lord. I don’t have any idea about how the first accused person arrived at these amounts, since it was a discussion to which I was not a party.
Q. And you, as the Managing Director of the Capital Bank, did not find out from the first accused person how he arrived at these figures. Is that what you want this court to believe?
A. No my Lord. As I have indicated in my various submissions, I was not in favour of the payment of this business promotion. And, indeed, in the minutes on October 16, 2016, I actually stated that due to the high cost of this liquidity support the Bank should not go for it.
Q. You said in your evidence that the decision to place GH¢100 million with All Time Capital was taken by the Board of Capital Bank?
A. Yes.
Q. I am putting it to you that there was no Board decision to place GH¢100 million with All Time Capital and that is why you were not able to provide any Board decision to that effect?
A. As part of my evidence, I provided two memos directed to the Board requesting approvals to make placements of GH¢100 million with All Time Capital and GH¢30 million with Nordea Capital, and these memos were duly signed by the Vice Chairman of the Board on behalf of the Chairman and Mr. Ato Essien as a member of the Board.
Q. I am putting it to you that these memos you have just referred to do not constitute Board decisions?
A. The memos were directed to the Board and were approved by the Board.
Q. The GH¢100 million transferred to All Time Capital was paid in two tranches of GH¢60 million and GH₵40 million?
A. Yes.
Q: On October 2, 2015, you signed a memo approving the payment of GH¢60 million to All Time Capital?
A. Yes.
Q. On October 7, 2015, you signed another memo approving the second tranche of GH¢40 million to All Time Capital?
A. Yes.
Q. These memos were written to you seeking your approval?
A. Yes.
Q. You have said in this court that in respect of the placement of the GH¢100 million with All Time Capital, the request first came by a memo from the Board duly signed?
A. Yes.
Q. Is it the memo dated October 15, 2015?
A. Yes.
Q. The memo dated October 14, 2015, is a memo from you as MD to the Board of Directors of Capital Bank seeking approval from the Board?
A. Yes.
Q. It was prepared for the signature of the Board Chairman and A1?
A. Yes.
Q. The Board Chairman did not sign this memo?
A. I have indicated that the Vice Chairman signed on behalf of the Board Chairman.
Q. So the first accused and Vice Chairman signed the memo to authorise the placement of 100 million with All Time Capital?
A. Yes.
Q. You will agree with me that the first accused and the Vice Chairman does not constitute the Board.
A. Yes, but they were representing the Board.
Q. I am putting it to you that the memo cannot, therefore, be a Board approval.
A. No. It constituted approval on behalf of the Board.
Q. You sign the memo on October 15, 2015?
A. Yes.
Q. A1 and the Vice Chairman of the Board must have signed on or after October 15, 2015?
A. They did not indicate the date they signed it.
Q. But you agree with me that they could not have signed before October 15, 2015?
A. Yes.
Q. I am putting it to you that the memo was signed by you, A1, and the Vice Chairman of the Board a few days after the Board and EXCO meeting of October 13, 2015, to discuss the transfer of GH¢130 million to All Time Capital?
A. Yes.
Q. I am putting it to you that before you signed the memo authorising the placement there had been no discussion on the transfer of GH¢100 million to All Time Capital?
A. There have been discussions on this transfer, but management by itself did not support these transfers.
Q. I am putting it to you that before you sought authorisation from the Board on October 15, 2015, the GH¢100 million had already been transferred to All Time Capital based on your approval?
A. The transfer of the GH¢100 million to All Time Capital had the approval of the Board.
Q. I am putting it to you that the All Time Capital statement of account with Zenith Bank showed that GH¢60 million was transferred to All Time Capital on October 22, 2015, while GH¢40 million was transferred on October 9, 2015, long before your memo dated October 15, 2015?
A. I stand by my testimony that the placements with All Time Capital and Nordea Capital were approved by the Board.
Q. I further put it to you that the monies had been transferred long before the Board and EXCO meetings on October 13, 2015?
A. These transfers were approved by the Board.
Q. I am further putting it to you that within the same month of October, All Time Capital transferred the GH¢100 million to MC Management Service for the purchase of the commercial paper by Capital Bank?
A. As I have stated clearly in my evidence-in-chief, Capital Bank did not at any time issue any commercial paper in favour of MC Management Services.
Q. I am putting it to you that you signed this commercial paper on October 13, 2015, on behalf of Capital Bank?
A. My Lord, I deny emphatically that I signed any commercial paper on behalf of the Bank in favour of MC Management. I do not know MC Management, and further investigations reveal that that signature was not my signature.
Q. And I am putting it to you further that you signed the commercial paper in the presence of PW11 (Aseye Seyram Akortia)?
A. I deny vehemently having singed any commercial paper in the presence of the said witness.
Q. You have said in your evidence-in-chief that the decision to place GH¢30 million with Nordea Capital was taken by the Board of Capital Bank?
A. Yes.
Q. I am putting it to you that the Board of Capital Bank never approved the placement of GH¢30 million with Nordea Capital, and that is why you were unable to provide a single decision of the Board in this regard?
A. As part of my evidence, I have provided a memo that was approved on behalf of the Board for the placement of 30 million with Nordea Capital.
Q. Is this memo you are reforming to Exhibit 28p dated October 23, 2015?
A. Yes.
Q. This memo is from you as MD to the Board directors.
A. Yes.
Q. The memo was approved by A1 and the Vice Chair on behalf of the Board Chair. Is that correct?
A. Yes.
Q. Again, this approval must have been given on the same day – October 23, 2015, or after. Is that not so?
A. Yes.
Q. I am putting it to you that the Board of Directors of the Capital Bank never met to discuss this request from you prior to the approval given by A1 and the Vice Chair.
A. The approval for this placement was given by the Board.
Q. I am putting it to you that the approval of this request and the Vice Chairman did not constitute a Board approval.
Q. The memo was directed to the Board and approval was given on behalf of the Board?
Q. Before the memo the Board was written to on October 23, 2015, GH¢15 million out of the GH¢30 million was transferred to Nordea Capital. Is that not so?
A. The decision to place GH¢30 million with Nordea Capital was approved by the Board.
Q. I am putting it to you that this so-called placement with Nordea Capital was initiated in a conversation between you and PW13 Edem Barts-Williams?
A. The approval was given by the Board.
Q. It was based on this discussion that the request from Nordea was written, and not based on the Board approval?
A. The minute of October 13, 2015, clearly indicates that the request for these transfers was discussed by the Board and approvals duly given.
Q. I am putting it to you that the GH¢30 million transferred to Nordea Capital in two tranches of GH¢15 million was supposed to be 91 fixed deposits?
A. Yes. They were placed for 91 days tenure.
Q. I am putting it to you that within a week of the transfer of the two tranches of 15 million these funds were used to purchase commercial paper from MC Management based on your instructions?
A. My Lord, I deny this emphatically. The Bank has absolutely no hand in the issuance of commercial paper to any third party.
Q. I am further putting it to you that on these two occasions you dither asked PW13 to contact A1 for details of MC Management, which he did.
A. I again deny ever giving such information or any such discussions with PW13. I further state that during the investigation of a confrontation with PW13, he could not provide any evidence.
Q. I am putting it to you that in that at the confrontation you did not request PW13 to provide evidence of the instruction you gave him?
A. On the contrary, I requested that information which PW13 could not provide, because it did not exist. The Bank at Mariama Owusu time never issued a commercial paper.
Q. You have testified that it was A1 who requested the placement with All Time Capital and Nordea Capital. Is that so?
A. My Lord, in the various minutes it had been stated clearly that these placements were twisted by A1.
Q. A1 was a member of management so how did he become an arranger of the placement?
A. What I stated is that he requested the placement.
Q. You have said that you, as MD, and the Board of Capital Bank impressed on A1 for the repayment of [the] supposed investments in All Time and Nordea Capital?
A. The placements with Nordea Capital and All Time Capital were investments by the Bank at the request of the first accused. Management, by the Managing Director, expressed their disapproval of this placement.
Q. If these placements were genuine placements there would have been an official correspondence between Nordea, All Time, and Capital Bank on the return of these funds?
A. Yes. It was the responsibility of the Treasury Department to follow up on the repayment of these payments.
Q. I am putting it to you that as the Managing Director you had the responsibility more than the Treasury Department in ensuring that the funds were returned to the Capital Bank?
A. It was the responsibility of the Treasury Department to follow up on the repayment of these placements, and I did nothing to disable them to carry out this function.
Q. At this meeting, A1 said he was not going to disclose the purpose of the GH¢130 million, saying that it was highly classified information?
A. Yes.
Q. The first accused further promised to pay back the GH¢130 million by March 21, 2016?
A. He promised to ensure the repayment of these placements with interest by 21 March 2016.
Case to continue on July 21, at 11:00 am.
