The former Managing Director of defunct Capital Bank, Reverend Fitzgerald Odonkoh, has been accused of supervising the placement of GH¢130 million to All Times Capital and Nordea Capital for the personal benefit of William Ato Essien, when it should not have been the case.
The GH₵130 million was part of GH¢620 million liquidity support from the Bank of Ghana to salvage Capital Bank’s insolvency and GH¢27.5 million of the amount was also paid to Mr Essien, as business promotion.
But, the founder and CEO of the collapsed Capital Bank, Ato Essien, allegedly requested the placement with All Times Capital and Nordea Capital, with the promise to pay back with interest.
The Commercial Division of the Accra High Court, trying Mr Essien, Rev. Odonkoh and Tetteh Nettey, Director of MC Management Services – a company also owned by Ato Essien- was told by the prosecution, led by Chief State Attorney (CSA), Marina Appiah Opare, that despite the Board Chairman on March 31, 2015 promise to ensure that the funds were returned, Ato Essien failed to pay neither the principal nor interest on the GH₵130 million.
As a result, Emmanuel Nikoi, then Head of Treasury of Capital Bank, allegedly informed management in a meeting that he has sent a mail to Mr Essien reminding him of his commitment, but that effort proved futile.
The court, presided over by a Court of Appeal Justice, with additional responsibility of the High Court, Eric Kyei Baffour, was informed last week Thursday that there were no placement or investment certificates procured by Capital Bank, yet the management never discussed it in their meetings.
On these grounds, Mrs Opare argued that the MD cannot be decoupled from the conduct of Ato Essien, since he sent the memo requesting for authorisation of the board directly to the CEO, who requested the money, and the Vice chairman, Stephen Enchill to sign.
Rev. Odonkoh, however, argued that he could not be held liable for the actions of his former boss because the transactions were placements with the respective tenure and interest and that nothing disabled the Treasury Department from ensuring that the relevant certificates were obtained by the bank.
The following are some questions (Q) and answers (A) during the cross examination;
Q. I am putting it to you that it was the board chairman who promised to ensure that the funds were returned by March 31, 2015?
A. Yes.
Q. And this assurance was based on the promise by the first accused (Ato Essien) himself to pay the money by that date?
A. Yes.
Q. From the minutes of April 4, 2016 it is clear that management, headed by yourself (Rev. Odonkoh) knew that the funds transferred to All Time was for the personal benefit of A1?
A. It was A1 who requested that these placements be made with All Time Capital and Nordea Capital.
Q. And that is why Emmanuel Nikoi informed the meeting that he has sent a mail to A1 reminding him of his promise to pay back the funds given to him through All Time. I’m putting that to you?
A. Since it was A1 who requested for these placements to be made to the two companies against the advice of management and since he promised to ensure that the placements were repaid with interest on the due dates, we followed up on these repayments with him.
Q. You will agree with me that at the time of this meeting, no principal or interest payment had been made from the time the amount was given to the first accused person?
A. Yes my Lord. At the time of these minutes, no repayments of either interest or principal has been made by the respective companies.
Q. So your assertion in your evidence-in-chief that it was at this trial that you got to know that the Treasury Department failed, refused or neglected to procure placement or investment certificates for the placements cannot be correct?
A. My Lord, in evidence in chief, I stated that I was not aware that documents such as certificates which should have been received by the treasury department in respect of these transactions had not been obtained.
Q. I am putting it to you that you were very much aware long before the start of this trial that there were no placement or investment certificates to be procure by Capital Bank?
A. No my Lord. Since these transactions were placements with the respective tenure and interest, nothing disabled the treasury department from ensuring that the relevant certificates were obtained by the bank.
Q. I am putting it to you that it was why the no procurement of placement and investment certificates never came up for discussion at your meetings?
A. That is not so my lord. The provision of relevant certificate for such transactions was the responsibility of the Treasury Department, so did not come up as an issue for discussion.
Q. Emmanuel Nikoi was not part of management. Was he?
A. He was the Chief Finance Officer and he was part of management.
Q. Your memo in respect of GH¢100 million placed with All Time was sent from you directly to A1 and one other person to sign?
A. It was sent to the board of directors.
Q. Can you show from the memo dated 25/10/15 that the board of directors received this memo?
A. The memo clearly indicates that it was sent to the board of directors.
Q. I am putting it to you that you, as the managing director, sent this memo requesting for authorisation of the board directly to A1 who requested the money, and the vice chairman, Stephen Enchill to sign?
A. No. The memo was directed to the board of directors and was authorised by the vice chairman of the board and the major shareholder.
Q. I’m putting it further to you that in the same vein your memo to the board of directors requesting the authorisation to place GH₵30 million with Nordea Capital was sent by you directly to the first accused person and the vice chairman for their signatures?
A. The memo was sent to the board of directors and was authorised by the vice chairman on behalf of the board chairman and the major shareholder as a director in the company.
Q. In 2015, Edem Bart-Williams contacted you about Capital Bank making a placement with Nordea capital. Is that not so?
A. Yes.
Q. And you informed him that the first accused had already had discussions with you about making the placement with Nordea?
A. Yes.
Q. And it was after these discussions that Nordea wrote to Capital Bank requesting for investment totalling GH¢130 million?
A. My Lord, the request from Nordea capital was for placement of GH¢30 million
Q. In December 2015 capital bank made a transfer of GH¢100 million to Nordea capital in two tranches?
A. Yes.
Q. The tenure of these two tenors was to be 365 days?
A. Yes.
Q. A few days after Capital Bank transferred the first GH¢50 million to Nordea, you contacted Edem and asked him to purchase a commercial paper of GH¢15 million from Britlin services, which he did.
A. No my Lord. I deny emphatically of ever doing or making any phone calls with the said Bart-Williams for any commercial paper. I do not know Britlin and they had no business with any commercial paper.
Q. Not long after that the second tranche of GH¢50 million was transferred to Nordea capital and you caused a total of GH¢85 million to be transferred back to Capital Bank?
A. No.
Q. I am putting it to you that you admitted taking the decision to have the transfer of the GH¢85 million reversed in your confrontation with Edem, captured in the audio recording of the confrontation?
A. My Lord that is not the case. The bank was unable to make these placements with Nordea Capital.
Q. When Edem contacted you about this reversal you assured him that GH¢20 million would be credited to Nordea’s account as a fixed deposit which was indeed down by capital bank subsequently. Is that not true?
A. These are all completely different transactions and had nothing to do with the placement of GH¢30 million to Nordea Capital out of the liquidity support.
Q. You instructed Edem to purchase a commercial paper of GH¢20 million from Britlin Services, which he did?
A. I deny emphatically that I ever asked Dr. Bart-Williams to issue a commercial paper of GH20 million to Britlin Service. I have never been involved in any such transaction on behalf of the bank.
Q. I am further putting it to you that your instruction to Edem was through a telephone conversation, same as your instructions to him to make the placements were through telephone conversations?
A. I wish to state very clearly that all placements with Nordea Capital by the Bank were backed with proper documentation as in written request from the company and subsequent issuance of the certificate. It is, therefore, not possible for me in my position as the managing director to request the issuance of a commercial paper by a mere telephone call without any documentation backing it.
Additionally, at the said confrontation, Edem was unable to provide any documentation from the bank or sign by me in my capacity as the managing director on the said commercial papers.
Q. Michael Kwame Amoako’s report covers the period of February 1/2/15 to 31/12/15. Is that correct?
A. Yes.
Q. I am putting it to you that these various placements to All time capital and Nordea Capital are not captured anywhere in this report because no such placements existed?
A. These placements were duly recorded in the bank’s books and this examination report should have covered this placement. It is the responsibility of the Treasury Department to make sure that all placements duly made by the bank are properly recorded.
Prosecution: That will be all for the witness.
Counsel: We have asked the Registrar to ensure that service of the subpoena was done on the witness. But that has not been done. I will humbly pray that my Lord directs the Registrar for Mr Emmanuel Nikoi to come to court on the next adjourned date.
BC. As A3 has already served a subpoena on Emmanuel Nikoi to appear before the court but the date for his appearance was uncertain, I order that the subpoenaed witness appears before the court on 28th July 2022 at 11 am. Suit accordingly adjourned to the 28th of July, 2022.
