Receiver of Capital Bank doubts certificates issued by 3 coys
The Receiver of Capital Bank, Vish Ashiagbor, has told an Accra Commercial Divisional High Court that he had suspicions over some certificates in a total sum of GH¢105 million used as collateral by three companies to secure loans from the defunct bank.
Mr Ashiagbor, who is the Director of Price Waterhouse Coppers (PWC), was in court as first prosecution witness (PW1) for the trial of the former management of the defunct Capital Bank.
His doubt over those certificates was that until they took over the receivership of the company, those certificates were not to be found.
The PWC Director told this to the court, presided over by a Court of Appeal Justice sitting as an additional judge of the High Court, Justice Eric Kyei Baffour.
Meanwhile, Baffour Gyawu Bonsu, lawyer for the first accused person, William Ato Essien, Founder of the defunct Capital Bank, in disagreement, said the companies had transactions with the bank in an amount of GH¢70 million, and that resulted from rediscounting invoices.
According to the defence counsel, the said companies had executed work for the Department of Urban Roads and were issued certificates for payment.
He, therefore, asked Mr Ashiagbor whether he can confirm the value of those certificates held by the three companies from the Department of Urban Roads, but PW1 answered that “our report was based on documentation available at Capital Bank.”
The lawyer further added that in the report prepared by the Receiver, it established that Capital Bank wrote to the Department of Urban Roads and it was confirmed that those certificates existed.
He pointed out to Mr Ashiagbor that it contained in his report that it was established that it was normal practice for Capital Bank to discount facilities or invoices by giving them lesser amounts in this case.
And, in this particular case, Capital Bank was expected to make a profit of GH¢30 million from discounting the certificates held by the three companies.
He noted that these certificates were assigned to Capital Bank as collateral for the sum of GH¢105 million for the three companies, but the Receiver responded that it was one of the reasons they found the transactions suspicious.
The Receiver was then asked whether they wrote to the Department of Urban Roads to confirm whether those certificates existed or not, but Mr Ashiagbor answered in the negative, saying, “No we did not. We reviewed the documentation that was available, with respect to this transaction, and taking an overall view, we found the transaction to be suspicious and referred it for further investigations.”
The lawyer, unconvinced, pushed him further and asked, “in view of the fact that you own report found evidence that Capital Bank has actually exhibited the existence of those certificates, was it difficult for the Receiver to check with the Urban Roads?”
The Receiver answered: “We look at the totality of the document available around this transaction, and we believed that, overall, the transaction was suspicious, and on that basis we referred it to the BoG for further investigation.”
The BoG revoked the licence of Capital Bank and appointed Mr Ashiagbor and another as joint receivers. In Mr Ashiagbor’s witness statement, GH¢600 million received by the defunct bank from BoG, over 25 percent, was paid to its Director.
He also said that the defunct bank approved some monies for some companies and GH¢17 million of the amount from BoG was transferred to Kate Quartey Papafio at Cal Bank.
Ato Essien, who is also a Majority Shareholder of Capital Bank Limited, Tetteh Nettey, Managing Director of MC Management Services, a company established by Essien, and Fitzgerald Odonkor, a former Managing Director of Capital Bank, were admitted to bail in the sum of GH¢200 million each, while Kate Quartey Papafio, a businesswoman and Chief Executive officer of Reroy Cables Company Limited, was admitted to bail in the sum of GH¢75 million.