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Ato Essien suffers fatal blow at court

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William Ato Essien

The Founder and Chief Executive Officer (CEO) of the defunct Capital Bank, William Ato Essien, has suffered another blow as the court dismissed his stay of proceedings application. The dismissal is second in a row by the Commercial Division ‘7’ of the Accra High Court.

Ato Essien had wanted the court to stay proceedings, pending determination of an appeal at the Court of Appeal. The judge held that ‘stay’ is at the discretion of the court and that the defunct bank’s CEO did not establish enough grounds to warrant his request.

Meanwhile, he has justified that the placement of GH¢130 million to Nordia Captial and All Times Capital was part of the collapsed bank’s initiative to invest and pay back the liquidity support. He said the then Captial Bank, which is in receivership, respectively placed GH¢100m with All Times Capital and GH¢30 million with Nordia Captial.

According to him, per the terms of agreement between the defunct Capital Bank and Bank of Ghana (BoG), the liquidity support, which was a commercial loan, must be paid back with interest, hence the investments.

He told the Accra Commercial Court, presided over by Court of Appeals judge, Eric Kyei Baffour, last week Thursday that the liquidity support was not free money, the  reason the bank  paid GH¢240 million to the BoG as part of the principal and the component interest before the take-over.

Ato Essien reiterated that the bank was required to utilise the funds per the terms of the contract, which was why the board of the defunct bank placed GH¢130 million with All Time Capital to enable it pay both the principal and the component interest of the liquidity support.

He said this while his Counsel, Baffour Gyawu Bonsu Ashie, was cross examining the Managing Director of the defunct bank, Fitzgerald Odonkor, as the third accused (A3) in the case.

The Counsel stated that “and so, this liquidity support that was granted to the then Capital Bank from your answers in this court, was not free money that was given to the capital bank?”

The third accused (A3) answered in the affirmative, explaining that the records available to the court indicate that the amount that was paid back to BoG by way of interest and principal at the time of the bank’s takeover was about GH¢245 million.

A3 testified that although it was the decision by the board to place GH¢100 million to All Time Capital and GH¢30 million to Nordia capital, management was, however, against the decision, since the placements will not auger well for the management of the liquidity support.

The Counsel, however, argued on behalf of the client that the GH¢100 million, which was placed with All Time Capital was secured by All Time Capital on fixed deposit bond financial services, First Trust Savings and Loans, Ideal Finance Limited and Midlands Savings and loans as security for the said placements.

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