Julius Ayivor, a lead team member of the Receiver of collapsed banks, has described the operations of Beige Bank as a taking from Peter to pay Paul scheme.
He cited Bidvest Microfinance Limited funds as one of Beige Bank’s customers that suffered from this take from Peter to pay Paul scheme.
Mr. Ayivor made the observation while being cross-examined by Thaddeus Sory, Counsel of the former Chief Executive Officer (CEO) of Beige Bank Group Limited, Michael Nyimaku, in a GH¢2.1 billion trial.
As the prosecution’s first witness (PW1) of Attorney General (A-G), Mr Ayivor, told an Accra High Court, presided over by Justice Afia Serwaa Asare-Botwe, on Friday, that Beige Bank siphoned about GH¢3 million from Bidvest to its subsidiary, BCAM.
PW1 added that the Government of Ghana (GoG) had to bear the cost to pay Bidvest from its bailout package.
However, Mr. Sory indicated to the court that PW1’s claim was false per his Peter to pay Paul theory.
The counsel argued that if PW1’s Peter to pay Paul theory was anything to go by, it therefore could not be said that Bidvest was paid out the Government of Ghana bailout package.
“If you look at your Exhibit H 15, you will [see] a transaction on 25th April, 2018, it is the credit to the account to Bidvest Microfinance Limited in the sum GH¢3 million,” he pointed out.
Mr. Sorry said Bidvest was fully paid by Beige Bank, but its name was among the lists of customers paid out of the government bailout package.
He said the amount was paid to Bidvest on April 25, 2018, while the Beige Bank went into receivership on August 1 of the same year.
The witness admitted from the records of payment that were made to the affected customers on Exhibit 5, Bidvest’s name did not appear, confirming that payment was not made twice.
Mr. Ayivor added that there was no record of any payment made to Ideal Finance in Exhibit 5 in connection.
Mr. Nyinaku is facing 43 criminal charges of stealing, defrauding, breach of trust, and money laundering.
Excepts of the cross-examination
Q. I’m putting it to you that Exhibit 23 and Exhibit AB1 are completely different things, which you claim are extracts of statements?
A. Yes. Exhibit AB1 is the extract of statement.
Q. Now, if you look at your extracts Exhibit AB1 from customer number 4632 to 4834. Those are all customers of the bank whose monies, as recorded in Exhibit AB1, are supposed to be transferred from the bank to BCAM, is that correct?
A. Yes, without their authorisation.
Q. Take [a] look at your Exhibit AB1, all these customers had their monies transferred on the same day, on the 18th of April, 2018. Is that correct?
A. Yes.
Q. Since Exhibit H18 is a statement of BCAM for the same, I was expecting [the] names of about 190?
A. No, it’s 206.
Q. Why did it not reflect?
A. Exhibit H series that pertain to BCAM account are only extracts of specific dates when those transfers were made. There would be other transactions on the same day that are not included in the Exhibit H series, that is why we provided the full complement from inception of when the bank’s license was revoked.
Any transactions that occurred on 18th April 2018 that are not contained on this print out would be contained on the soft copies. If I may quickly check; because of the size of the BCAM account statements. Extracts of BCAM account from Beige can only be done piecemeal to avoid the system being unable to give you the information that you required.
So you will set two dates that are close to each other just to ensure the system is able to provide you with the information you require. If you set two dates that are far apart, the transactions that would be contained within those two would be just too much for the system to be able to provide you the information that you require. So the best option is to do it in bits, so the specific transactions you need would extract easily.
Q. I’m putting it to you that the only reason why you could find two customers, as between Exhibit H18 and AB1, out of the over 200 customers of the bank who were alleged to have had the funds with the bank transfer to BCAM on the same day April 18, 2018, is because Exhibit AB1 is not credible?
A. That is not so; Exhibit AB1 is very credible because information contained on Exhibit Ab1 was extracted from the Beige Bank, and it’s very credible.
Q. Now, from your testimony earlier this afternoon you confirm to the court that monies credited to BCAM resulting from transfer from the bank to… becomes part of BCAM funds, is that correct?
A. My lady, I did not state that. What I said was that the funds siphoned out of the accounts of the affected customers stood to the credit of BCAM, giving BCAM the right to the funds from the Bank.
Q. Give him Exhibit 4. Now you confirmed earlier to the court that Exhibit 4 is a writ of summons filed by the Receiver against the Accused Person?
A. That is so.
Q. If you go to Exhibit 4, there is a heading which says “the liability of BCAM to the bank. Have seen that thing?
A. I have seen that heading, but it does not state the liability of BCAM, but it says the liability of the accused person and BCAM.
Q. In Paragraph 347 of Exhibit 4, the Receiver says using the following certificate of investment, which a specific number represents the bank funds…the accused person’s instructions, supervised the investments of the bank. That is what the Receiver says?
A. The Receiver didn’t say just that the accused person instructed and supervised the investment of GH¢40 million…that paragraph made reference to specific investment the bank made with BCAM out of its own funds.
A. Does the bank have different funds? Because from your testimony this morning, the bank’s funds constitute one fund; coming from customers and shareholder among others?
A. The bank had only one pool of funds or resources.
Q. So if you take a look at paragraph 148 of Exhibit 4, you will realised that the Receiver deals with several other incomes of BCAM, and described them as investments?
A. Yes my lady, and if you also look at paragraph 50, you will note that the Receiver also made reference to a series of other transactions from..2017, where the accused person instructed and supervised the transfer of over 10,000 deposits totally in excess of GH¢4,480 million to BCAM.
The investment referred to in paragraph…are totally and wholly different from the funds that were siphoned out of the 10,000 plus affected customers. My lady, I will take time to explain the two types of transaction that are spelt in the paragraph.
When a customer deposits funds with a bank, the bank gives the customer what we call the credit, in other words, the customer’s account is credited, which simply means the bank owes the customer to the extent of the funds the customer brought to the bank.
The bank will accommodate all the funds and trade with those funds would means the bank will give out loans to businesses that need loans at a specific transaction rate, or the bank may decide to buy government bonds or T bills, or the bank may decide to invest in a fixed term deposit of another entity.
My lady, when that happens, the entity with whom the bank places those fixed term deposit which is a contractual agreement between the bank and that entity would issue the bank with a certificate to show that the bank owned that money.
This is different; the situation whereby credits that are sitting on the account of the customers get siphoned to another entity somewhere that is clearly set out by the Receiver in Exhibit 4 and paragraph 124 and paragraph 150 on these others.
Q. In paragraph 150, the Receiver did not use the word siphoned?
A. Yes.
Q. When we also take a look at your Exhibit AB1, it is also possible to tell the nature of arrangement of how the funds were transferred to BCAM?
A. That is not entirely so.
Q. Show him Exhibit K. Is it the First African Savings and Loans account with the bank?
A. It is a statement for one of two accounts in the name of First Savings and Loans with Beige Bank.
Q. You said in your testimony that it is into this account that the funds deposited with the Beige Bank were siphoned into, is that correct?
A. That is so my lady.
Q. Now if you take a look at that statement, Exhibit K, can you point out the names of those customers whose funds were transferred to First Africa Saving Loans (FASL)?
A. My lady, I can’t. The names of the affected customers are not contained in Exhibit K, because the funds were not siphoned out of their accounts directly into Exhibit K. The funds were siphoned out of the affected customers into the account of BCAM, and then, subsequently, move to the account of BCAM to Exhibit K, which is a fictitious FASL account. The names of the affected customers could be in the Exhibit H series and not Exhibit K.
Q. When we were examining the Exhibit H series, you were able to point out the specific customers and the corresponding statements, and in this particular case are you able to point to the court the specific customers’ funds, which were transferred to FASL?
A. I can trace the transfer to BCAM to FASL.
Q. Exhibit K is before you, can you just trace it?
A. My lady, the BCAM statement that would show the corresponding debits of the various credits on Exhibit K are not attached to Exhibit K. My lady, if I may ask for my witness statement. My lady, I just realised that the BCAM statement that would reflect the fictitious FASL account has not been printed and attached. You will request; I read to you we will provided …when we were requested to provide the entire BCAM statement. If we will be indulged I also have those transactions on my pen drive.
Q. I didn’t ask that question?
A. I can, however, identify the specific accounts. I just would not be able to check the correspondence.
The first transaction is Exhibit K is dated 15the March, 2018, in the amount of GH¢40 million, and the description BC#000060PEDB/0 BCAM mobilisation; second one is date 22nd March, 2018, with a similar description and with the amount of GH¢50 million; third one is in the amount of GH¢60 million, dated 10th April, 2018; 4th is in an amount of GH¢25 million, also with a similar description dated 18th April, 2018; this with an FT reference number; the fifth is dated 26th April, 2018 in the amount of GH¢35 million described as funds transferred from BCAM to FASL, also with FT; the sixth is dated 27th January, 2018, in an amount of GH¢50 million described as fund transferred.
Court: The documents are with the court for the benefit of us to read.
Q. If you look at your Exhibit H 15, you will a transaction on 25th April, 2018, it is the credit to the account to Bidvest Microfinance Limited in the sum GH¢3 million.
A. That is so my lady.
Q. It is described as FTD redemption. Is that correct?
A. That is so my lady.
A. Let’s go to Exhibit K. You will see the date, 25th April, 2018, which is in the statement of FASL.
A. That is so.
Q. You will see a debit transaction of the sum GH¢3,127,397.27 on FASL account.That is correct?
A. That is correct.
Q. It is described as FTD redemption?
A. Yes. My lord, it is True that not Bid received GH¢3.1 million about 26th April, 2018, and that credit was paid out of the fititious FASL account which is Exhibit K and this goes to confirm what we have been discussing for the past weeks. If you study Exhibit K carefully on 7th March, 2018, Bidvest made a check deposit of GH¢3 million bring the balance on that account to GH¢6 million.
On the same day, Bidvest wrote a cheque of GH¢3milliin in favour of Unibank, bringing their balance to GH¢3 million. On 12th March, 2018, the GH¢3 million that remained on the account of Bidvest was siphoned out of the account to BCAM account, leaving a paltry balance of GH¢20 realising that Bidvest wanted their funds back, the Accused Person paid about GH¢3,127,397.27 to Bidvest just about one and half month after the funds were siphoned out of their account.
My lady, the GH¢3 million funds was not brought back by the bank by BCAM. So to meet the needs of Bidvest funds of other customers had to be siphoned out into the fititious FASL account, which is Exhibit K out of the GH¢3.1 million was paid out to Bidvest. My lady, this is a scheme, which also called robbing Peter to pay Paul.
Q. Whatever scheme you called it as between the bank and Bidvest the bank fully discharge?
A. That is so and that is the expectation. However, the GH¢3 million that was siphoned out to BCAM on Exhibit H 15, never came back to the bank.
Q. From your Exhibit AB1, Bidvest is one of the companies that was paid out of the Government bailout package?
A. Yes.
Q. It is clear from Exhibit 15 and Exhibit K that Bidvest was fully paid its investment funds so who robbed Peter to pay? Yet it’s name appeared as it fund paid out government bailout?
A. The GH¢3 million, which was siphoned out of the Bidvest account, was part of funds that had to be provided to settle the affected customers. My lady, you will note that when I explained the scheme to be robbing Peter to pay Paul, there were specific deposits that were siphoned from Beige Bank to BCAM to subsequently to FASL account. Those customers that were robbed to be able to pay Bidvest that is Peter, the GH¢3.1 million is a component of the bailout package.
Q. In terms of of robbing Peter that is the public purse that is Bidvest, I’m putting it to you, to the extent that Exhibit K15 that Bidvest was fully paid, having Bidvest on the list of payees is what typically explain robbing Peter to pay Paul?
A. The funds that were siphoned out of accounts of the other affected customers which were eventually moved out to fititious FASL account had to be eventually paid back. So my lady, if the GH¢3 million, which were siphoned out of the Bidvest account is confirmed to be paid out to Bidvest. it is the fact that customers whose funds formed part of the GH3.1 million that was paid to Bidvest on 25th April, 2018, also had to be paid back. So there is no issue of double counting in this instance.
Q . So those customers who received the payment that were due to Bidvest had those names together with those customers who received their bailouts were included in the list of those still to receive their investment in respect of which it has earlier been paid?
A. That’s not so. If I may call for Exhibit AB1. On Exhibit AB1 Bidvest. However, when you look at the records of payment that were made to the affected customers on Exhibit 5 Bidvest name does not appear confirming that payment was not made twice.
Q. So regardless of what we just find out from Exhibit AB1. The answer you have just given to the court your in your Exhibit AB1, which is representing to the court that everyone on the Exhibit AB1 was paid out of the government bailout is not credible?
A. I did not say that Exhibit AB1 is the list of the payment made to the affected customers what I stated was that Exhibit AB1 is the list of customers whose funds were siphoned out of their accounts.
You will noted that in the case of Ideal Finance for instance even though the funds of Ideal Finance is contained in exhibit AB1, there is no record of any payment made to Ideal Finance in Exhibit 5 in connection with the specific fact because Ideal Finance is currently in receivership and the receiver has not made any claim.
