The Managing Director of the defunct Capital Bank, Reverend Fitzgerald Odonkor, has told an Accra High Court that he protested against GH¢27.5 million that was given to the Founder of the bank, William Ato Essien, as business promotion.
According to Rev Odonkor, third accused (A3), who is being tried alongside Ato Essien and another, said he expressed serious concerns about the payment of business promotion because it was detrimental to the bank’s operations.
He said even though Capital Bank, which is currently in receivership, was operating normal at the time it received the liquidity support from the Central Bank, it was insolvent.
He told the court, presided over by a Court of Appeal Justice, Mr. Eric Kyei Baffour, that the then Capital Bank was struggling to pay customers their funds.
Rev Odonkor added that despite his misgivings, frustration and rejection of the idea of paying the GH¢27.5 million business promotion to Ato Essien, the Board of Directors still went ahead and approved the fund.
He indicated that after the approval, the Treasury Department sanctioned the payment of the colossal amount to Ato Essien, first accused (A1) in the trial.
The third accused (A3) in the case stated that he would not have sanctioned the payment of the business promotion if it had been any other person apart from the Chief Executive Officer of the bank.
Rev Odonkor further indicated to the court that during Board meetings he expressed similar sentiments of management about the utilisation of the liquidity support, but the advice fell on the rocks.
He said these concerns also encapsulated GH¢130 million placement that the Board approved for All Times Capital and Nordia Capital.
“Management was of the opinion that for the effective management of the liquidity support, it was not prudent to place GH¢30 million with Nordia Capital,” he indicated.
According to him, the defunct Capital Bank paid an amount of GH¢9.4 million as interest on the liquidity support to the Bank of Ghana (BoG) and not GH¢900,000, as the court had been told.
The third accused also said he could not answer to the Treasury Department a GH¢35 million placement that Capital Bank made to Nordia Capital.
However, Baffoe Gyawu Bonsu, Counsel for Mr. Ato Essien, said one reason for A3 raising the concern was that he, as the Managing Director of the then Capital Bank, was of the view that because the Bank had liquidity challenges, it should refrain from any business promotion.
According to him, until 2019 that the Bank of Ghana outlawed business promotion it was a normal practice in the banking industry.
He continued that the liquidity support that was granted to the then Capital Bank was a commercial loan that the latter had to pay back to the Central Bank.
He further argued that Rev. Odonkor did not have any knowledge about the GH¢35 million placement to Nordia Capital, because that transaction never existed.
The Counsel also stated that Rev. Odonkor, as Managing Director, did not have the authority to consider and reconsider the quantum of business promotion to be paid if the Board of Capital Bank had approved of same.
“And because the Board had taken that decision, you, as the Managing Director, couldn’t have done otherwise,” to which A3 answered in the affirmative.
Mr. Gyawu Bonsu, who was cross-examining A3, further stated that Rev. Odonkor did not have any proof of his claim.
The court also dismissed an application made by Ato Essien for a stay of proceedings.
The application was about a pen drive containing an audio confrontation between Ato Essien and the investigation team, which had been admitted by the court.
Ato Essien had wanted to stay the High Court proceedings pending a determination by the Court of Appeal.
