Julius Ayivor, a lead team member of the Receiver, has testified before an Accra High Court that proposals submitted by entities under Beige Group Limited were very insulting.
According to him, despite these entities owing monies running into millions of Ghana cedis, some of them proposed to make monthly payments of GH¢500.00.
Testifying as the prosecution first witness, he said the entities’ proposals were in response to a letter addressed to them in relation to funds advanced to them by Beige Bank.
Mr. Ayivor told the court, presided over by a Court of Appeal Judge with additional responsibility of the High Court, on Monday: “Some indicated their willingness to pay their debts owed to Beige Bank. However, the proposals they submitted were very insulting, because some of them proposed to pay monthly amount of, some instances, GH¢500 for a debt that is in millions.”
This response landed him a follow-up question from Thaddeus Sory, Counsel for Michael Nyimaku, former Beige Group of Companies Chief Executive Officer (CEO), while cross-examining him.
The Counsel asked the witness how much the Receiver indicated was less insulting to him to enable these entities make better proposals, but Mr. Ayivor could not give a definite answer, saying: “I will need to go back and check if there were any formal proposals to this.
The Counsel, in furtherance to the answer, wanted to find out from the witness whether he would be in the position to tell the court, which of the entities wrote back to the Receiver and made the insulting proposal, and this time around also the witness insisted that he needed to go back and check.
Beige Bank acquiring equity shares in FASL
The former President of the Ghana Journalists Association, Gifty Afenyi-Dadzie, and her husband, Kwesi Tetteh Dadzie, also cropped up in the trial.
The couples’ names were mentioned in connection with Beige Bank’s expression of interest to acquire equity shares in First Africa Savings and Loans (FASL), of which the duo were members of the Board of Directors.
The Dadzies had opened an account with Beige Bank bearing their signatures, but the Receiver later discovered that there was another alleged fictitious account with the signature card of two additional signatories of officers of the Beige Bank – Vanessa Akofa Atsu and Yvonne Phillips.
However, when Mr. Sory suggested that the FASL Managing Director wrote to Beige Bank to confirm the change in signatories because, the Beige Group had invested in equity shares of FASL the witness said he could not confirm that information for a fact.
The witness explained that for FASL to be able to operate a corporate account, it needed a Board resolution, and without it could not have opened one in the name of the company.
He told the court that FASL, through a Board resolution, opened an account ending with 121, but later another account ending with 122, without the Board’s approval, was opened, hence, it was illegal and fictitious.
“If it was, indeed, a regular account, there should have been a resolution of the Board of Directors of FASL instructing that account to be opened in their name, without which that account can only be described as illegitimate and fictitious.
And my lady, you can confirm that proceeds of… GH¢320 million were transferred from their accounts to that fictitious account. Out of it, the accused instructed [that] various payments, totally about Gh¢21 million, be paid out to companies owned and controlled by him, to the detriment of the affected customer. And it is contained in paragraph 22 of my witness statement,” he added.
The witness added that at the time of FASL’s revocation of license, it had about only GH¢12 million in its account with the Beige Bank.
All along the witness had testified that Beige Group, through its subsidiary Beige Capital and Asset Management (BCAM), siphoned depositors’ funds into a fictitious account with FASL.
When asked by the Counsel whether the Receiver engaged the Dadzies on the matter, he responded that personally, he didn’t, but he was aware a special investigation team (SIT) that was established to investigate cases relating to the collapse of Beige Bank had various discussions with persons associated with the matter under discussion, including Gifty Afenyi-Dadzie.
Accusation
The former CEO of the Beige Group Limited, Michael Nyimaku, has been charged with 43 charges of stealing, fraudulent breach of trust and money laundering.
The accused pleaded not guilty and was granted bail in the sum of GH¢200 million, with three sureties.
The case has been adjourned to March 27, 2023.
Cross-examination
Q: The letter, Exhibit 6, deals with the payments, which you have testified about in Paragraph 25 of your witness statement. Is that correct?
A: That’s so my lady, however, Paragraph 25 of my witness statement deals with some of the payments that are contained in Exhibit 6.
Q: Is there any of the payments in Paragraph 25 of your witness statements that is not reflected in Exhibit 6?
A: My lady, as far as I’m aware, the payment in Paragraph 25 in my witness statements are contained in Exhibit 6. I will, however, have to check the appendixes to Exhibit 6 against the details of the payment on Paragraph 25 to confirm whether there are any transactions in Paragraph 25 that are not contained in Exhibit 6.
Q: Exhibit 6 and Paragraph 25 of your witness statements are both before you, is that correct?
A: That’s so my lady.
Q: If you look at Exhibit 6, what it says that the Receiver has noted the transaction payments and advances on behalf of directors and shareholders in relation to parties to the banks, as well as their total outstanding balance?
A: That’s so.
Q: The Receiver also assessed the interest as extracted from the bank’s records…?
A: That’s not entirely so; what the Receiver stated was that the outstanding balance, together with interest, as extracted from the bank’s records on one hand, or as computed by him using the bank’s base rate, equaled about GH¢1.2 million. My lady, and that is because for some of the balances that are contained on exhibits related to party loans totally GH¢501 million, had interest of GH¢356 million that was extracted from the bank’s records.
However, balances related to directors, shareholders and prepayment project works totaling in excess of GH¢400 million also have an interest component, which was computed by the Receiver. And that is because those monies were siphoned out to the benefit of the accused.
There was no Board approval in respect of those payments. There was also no agreement between the banks and the beneficiaries of those funds to ensure that the amount the Board of Directors refunded to the bank is at arm’s length.
The Receiver needs to include an interest component, as there was no … known from the date when those payments were made to the date when the bank’s license was revoked.
Q. Since there is no free money, it was the reason the bank recorded all of these transactions that you testified about in Paragraph 25 of your witness statement, and from which the Receiver extracted?
A. That is so, and it is very normal for such transactions to be recorded. If they were not recorded in the books of the bank it would not have balanced. Recording those transactions gives anyone reviewing the record information about the nature of those transactions, when combined with other supporting documentation.
Q: That supporting documentation will still be with the bank. Correct?
A: That’s so, and there could be other supporting documentation external to the bank.
Q: Still with Exhibit 6; right under the table the Receiver informs the accused person that by virtue of Exhibit 6, he was formally demanding a repayment of all of those funds you mentioned in Paragraph 25 of your witness statements from the accused?
A. That is so, and that is because the Receiver’s mandate, as prescribed under Act 930, includes recovering debts owed the bank that could be made about those legitimately advanced by the bank, and those illegitimately siphoned out of the bank, so this paragraph is just indulgent of those mandates.
Q. Are you aware that under Act 930, it is not illegal for … to expose itself to a legal third party?
A. I’m aware that a bank can be exposed to related parties to some extent. There is a cap that is allowed under the Act.
Q Throughout your witness statement, you have not indicated whether the cap was exceeded?
A. Not explicitly.
Q. In Exhibit 6, the Receiver expressly told the accused if he fails to pay the funds the Receiver will treat him as defaulingt in Paragraph 25?
A. That’s so. In default with the content of the demand being made for a return of those funds.
Q. It is a letter signed by the accused?
A. That’s so.
Q. It is written to the Receiver of the bank?
A. That is also so.
The Counsel tendered the document through the accused. It is a document dated March 22, 2019, [and] addresses to the Receiver.
Q. That letter is clearly headed ‘demand to issue individual credit letters’?
A. That’s so. In addition to that, it also said exposure of the Beige Group.
Q. And in addition to your answer, the letter reminds the Receiver of the need to issue individual demand notices to each of the institutions connected to the Beige Group, which have exposures to the bank?
A. That’s so.
Q. The accused goes on to say in the letter that he has alerted most of them, and he can confirm that they are waiting [for] action from the Receiver?
A. That’s so.
Q. The accused finally tells the Receiver that he should kindly do it; write to the individuals concerned so [the] accused and the Receiver can make progress?
A. That’s so. Exhibit 7 relates to exposures of entities related to Beige Bank in connection with various facilities advanced by the bank to them. My lady, you will mostly find the outstanding balance of those facilities in Appendix 5, described as Reference 5 on page 10 of Exhibits 6.
There are 12 related parties indicated on that appendix and their balance totaling GH¢501 million. These exposures related to Beige Bank, and they are different from the GH¢281 million stated in Paragraph 25 of my witness statement. Indeed, the Receiver did make direct demands on the related parties, indicated on Page 10 of Exhibit 6, to repay the amounts advanced to them by Beige Bank, which are entirely different from the matter under discussion in Paragraph 25 of my witness statements.
Q. Page 6, it is clearly titled ‘Exposure to Beige Group’?
A. There is a demand notice also part of that. The title is ‘Demand notice and exposure of Beige Group of Companies’.
Q. If you look at Exhibit 7, it’s clear that the letter the accused wrote to the Receiver relates to the exposure to the Beige Group of Companies?
A. That’s so. It is clear from the reading of the title that it is exposure of the Beige Group, and my lady, the Beige Group is a separate legal entity wholly owned by the accused.
Q. Now, in your testimony before this court this morning, you confirm that the entities specify in Exhibit 6, include all the entities you mention in your Paragraph 25 and more. I’m putting that to you?
A. That’s not so. What I stated was that the transactions, that is the individual transactions that make up to GH¢281 million in Paragraph 25 of my witness statements, would be contained in the individual transactions that make up about the GH¢1.2 million of Exhibit 6. In fact, they will just be related to the first four categories stated in Exhibit 6, which are directors’ account, shareholders of Beige Group account, and payment of project works account.
Q. You also testified that the Receiver wrote to the entities in reference 5 of appendix 1 of Exhibit 6?
A. That’s so. As far as my memory serves me right they were written to
Q. Did they respond?
A. Some responded.
Q. Are you able to tell what some of them said?
A. Some indicated their willingness to pay their debts owed Beige Bank. However, the proposals they submitted were very insulting, because some of them proposed to pay monthly amounts, in some instances GH¢500, for a debt that is in millions.
Q. Did the Receiver indicate the less insulting to enable these entities make better proposals to him?
A. I will need to go back and check if there were any formal proposals to this?
Q. Are you able to tell the court which of these relates to parties that wrote back to the Receiver and made insulting proposals?
A. I will need to go and check.
(The court orders the witness to produce copies of responses on Monday)
Q. Show him this document, it is a letter written from the accused to the Receiver?
A: Yes.
Q. Surely, to the Receiver on May 7, 2019?
A. That’s so.
Counsel: We want to tender in the document.
Prosecution: No objection.
Court: The document is a letter addressed to the Receiver, dated May 6, 2019, and it has a certain attachment on refurbishment etc.
Q. Now, if you take a look at Exhibit 8, the last paragraph on the first page, the accused informed the Receiver that the bank undertook steps to rebrand as a result of the Bank of Ghana upgraded its license?
A. That’s so; what the accused person claimed.
Q. Go to Paragraph 17 of your witness statement. In that paragraph of your witness statement, you testified that the Beige Group expressed interest in investing in FASL?
A. That’s so, in the equity shares of FASL.
Q. Did they, the Beige Group, actually invest in FASL?
A. I don’t know that for a fact.
Q. FASL is in receivership, correct?
A. That’s so.
Q. And the Receiver of the Beige Bank is also the Receiver of FASL?
A. That’s not correct.
Q: Your testimony to this court confirms that at a point FASL wrote to change their signatories?
A. That’s so. They wrote to update the signatories of the one account that they opened with Beige Bank, and that account is No. 0381520414121.
Q. That is the subject matter to your testimony; is Exhibit E?
A. If I may call for Exhibit E. That’s so.
Q. Now, in Exhibit E, FASL proposes two groups of signatories?
A. That’s so.
Q. The first group, Group A mentions two individuals called Vanessa Akofa Atsu and Ms Yvonne Philips?
A. That’s so.
Q. From your Exhibit F, F1 and F2, these are officials from the Beige Bank?
A. That’s not correct. They are officials of the Beige Group, and Yvonne Philip is Executive Support Head of the Beige Group.
Q. I’m putting it to you that the reason why the MD of FASL signed the letter to Beige Bank, confirming the change of signatories to include Beige Group, is because the Beige Group has now invested in FASL?
A. That’s a plausible assumption to make. I cannot confirm it for a fact; whether the Beige Group Limited, indeed, invested in the equity shares of FASL.
Q. Now, did you ever find out a Board resolution to confirm a change in the signatories of FASL to include officials of the Beige Group?
A. No my lady. The only extract of the minute of the Board of Directors, which we came across, related to the opening of the account, and not the change in the original signatories to the account.
Q. Since you did not know that the Beige Group has successfully invested in FASL or not, did you cross-check why they will change their signatories to include officials of Beige Group, even without a resolution?
A. There were discussions between the accused person and official of FASL in connection with the Beige Group investing in equity shares of FASL. I’m assuming that as part of the preparatory procedures to consummate that transaction, officials of FASL thought it necessary to request a change in signatory to their legitimate account held with Beige Bank – the account ending with ….121
Q. Look at Exhibit G, which is the excerpt of the Board minutes you tendered to prove the opening of what you called the legitimate account of FASL. It does not have a name attached to it for its Chairman or Secretary?
A. There is no name under the Chairman who signed the excerpts of the minutes, but I can see it is the stamp of the company’s Secretary, which is Lennap Company.
Q. There is no evidence before this count to show what you called legitimate account of FASL was open in pursuant to the resolution signed by an unnamed Chairman (Exhibit G)?
A. There is a lot of evidence to prove that fact. Attached to Exhibit E is the signature card of account No.0381520414121, which was signed by Kwesi Tetteh Dadzie and Gifty Afenyi-Dadzie. The same names indicated in Paragraph E of Exhibit G to be the signatories to that account.
My lady, the date of those signatures was November 11, 2017, and an extract from the bank’s system, November 2, 2017. Attached to the same Exhibit G is a direct extract from the Beige Bank’s system of the original signatories to that same account. And there are Kwesi Tetteh Dadzie and Gifty Afenyi-Dadzie as Group A signatories, and Yvonne Philips and Vanessa Atsu as Group B signatories.
You can also confirm on the signature card, I earlier stated that Yvonne and Vanessa also had their signatures on the card. My lady, strangely in contravention of the extract of the minutes of the Board of Directors, dated October 26, 2017.
Q: So if what you are saying is correct, it means right from the first day of the first account, you will see from the examples that the signature card was signed by Kwesi Tetteh Dadzie and Gifty Afenyi-Dadzie, Yvonne Phillips and Vanessa Atsu on the same day on November 22, 2017?
A. That’s so, and it is very strange how a customer of the bank represented by its Board of Directors would by a Board resolution instruct the bank to maintain two clearly indicated individuals as signatories to their account – being Kwesi Tetteh Dadzie and Gifty Afenyi-Dadzie – only for the signature card of the record of the bank to have a name and signatures of two additional individuals who, by virtue of their position they held at Beige Group, exerted some kind of authority over officials of the Beige Bank.
My lady, the expectation would have been that pursuant to the minutes of the Board of Directors, only signatories of Kwesi Tetteh Dadzie and Gifty Afenyi-Dadzie should have been attached to that legitimate account.
(Exhibit E is a signature card and Exhibit G is an excerpt of the minutes of the Board of Directors produces this to the court)
Q: Now, Exhibit G is not a Board resolution?
A: It is a Board resolution, because it states that “it was resolved that…”
Q. Before the statement was resolved – that there was an indication of what the records states – which clearly states that it was an excerpt of minutes of the Board of Directors [meeting]?
A. That’s so, and it is very normal for Board of Directors to pass resolutions in their meetings. So this resolution was passed in the meeting of the Board of Director held on October 26, 2017.
Q I’m putting it to you that Exhibit G only provides information as to what was resolved, and it is not the resolution by itself?
A. It is the resolution of the Board of Directors in connection with the opening of FASL’s legitimate account, ending with 121.
Q. I’m further putting it to you that the account number ending 121 was never opened with any Board resolution passed by FASL?
A. The account number was opened in accordance with Exhibit G. The only difference is that Yvonne Phillips and Vanessa Atsu found their way on to the signature card in contravention of the clear resolution contained on Exhibit G.
Q. And I’m finally putting it to you that no board of Directors resolutions was required to open FASL’s account?
A. A Board resolution is the requirement for the opening of a corporate account in any bank, without which an account cannot be opened in a name of a company. So for the fictitious account ending with 122 opened in the name of FASL, if it was, indeed, a regular account, there should have been a resolution of the Board of Directors of FASL instructing that account to be opened in their name, without which that account can only be described as illegitimate and fictitious.
And my lady, you can confirm that proceeds of… GH¢320 million were transferred from their accounts to that fictitious account. Out of it, the accused instructed various payments, totally about GH¢21 million, to be paid out to companies owned and controlled by him to the detriment of the affected customer. And it is contained in Paragraph 22 of my witness statement.
Q. Take a look at your Exhibit G again, or you look at the Paragraph C, it authorised the Chief Finance Officer of FASL to meet the Beige Bank to open the account?
A: That’s so.
Q: Do you know who this Chief Finance Officer is?
A: I didn’t know him. I don’t know the Chief Finance Officer at the time of passing the resolution.
Q. I’m putting it to you that you are not in a position to tell if any account was opened pursuant to Exhibit G?
A: I din’t have to know the Chief Finance Officer of FASL at the time of the passing of the resolution to tell whether the account was, indeed, opened. It is a fact that the FASL legitimate account ending with 121 was opened at Beige Bank. In fact, at the time when Beige Bank’s license was revoked on August 1, the balance was in the region of GH¢12 million.
That information is available, and if counsel wants us to provide him with the statement of account of FASL’s legitimate account ending with 121, it would be a pleasure.
Q. If, as you suggest, Vanessa found her name in the signature card of the legitimate FASL account, contrary to Exhibit G, can you explain to the court how come the same Vanessa Akofa, contrary to Exhibit G, has her name, together with Hon Gifty Afenyi-Dadzie, signing a letter to the bank requesting a change of signatories?
A. My lady, I’m unable to confirm for a fact why the two individuals, or names and signatures of the two individuals, Gifty and Vanessa Atsu, are on Exhibit E. What I know is that from discussions with officials of FASL, the Beige Group had expressed to invest in the equity shares of FASL.
Q. Did you ask Afenyi-Dadzie about how come Vanessa Akofa is on the same documents with her?
A: Personally no, but I’m aware a special investigation team (SIT) that was established to investigate matters relating to the collapse of Beige Bank had various discussions with persons associated with the matter under discussion, including Gifty Afenyi-Dadzie.
I may not be in the position to answer questions on their interrogation on this subject.
Case adjourned to Monday March 27, 2023.
