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ADB shouldn’t be part of GAT

By: Emmanuel Bruce
Category:
Isaac Adongo
Isaac Adongo

The  Member of Parliament of Bolgatanga Central, MR Isaac Adongo, has stated that the ADB Bank should not be part of banks to be supported by the Ghana Amalgamated Trust (GAT), which is a special purpose vehicle  to bail out some five banks in the country.

He said this was because the government had already fully met the minimum capital requirement of the ADB Bank.

 “At the extraordinary annual general meeting held in late December 2018, the shareholders of the ADB Bank Limited, largely the Bank of Ghana and the Ministry of Finance, agreed that the BoG will convert its loan of GH¢150 million, which represents unpaid liquidity support to the ADB Bank, into equity. About GH¢233 million was to be raised by shareholders through a renounceable rights issue.

I am fully aware that the government took up all the rights with the finance minister paying the GH¢233 million on behalf of the state, he stated.

“This means the ADB Bank Limited has met the minimum capital requirement by GH¢427 million. So why is the ADB Bank Limited on the GAT list if not for dubious reasons?” he added.

No due diligence
He said  no due diligence or a valuation of the ADB Bank Limited had been done yet.

“How then can one determine the value of ADB to be able to enter into discussions with third-party investors such as GAT for equity investment?” he asked.

Violation of BSDI Act
The Member of Parliament also pointed out that the BoG and the MoF were violating the Banks Specialised Deposit Institutions Act 2016 (Act 930), as the Board of  the ADB Bank had still not been approved.

“Why has the BOG not approved the board of the ADB? Why are people involved in the collapse of the UT Bank and the Capital Bank allowed to sit on the Board of the ADB Bank contrary to the BSDI Act 2016 (Act930),” he asked.

“Section 58 of Act 930 and the Bank of Ghana’s Fit and Proper regulations states categorically that ‘ a person shall not be appointed or elected or, accept an appointment or election as a director or key management personnel of a bank, specialised deposit taking-institution or financial holding company if that person (d)  has been a director, key management personnel or associated with the management of an institution which is being or has been wound up by a court of competent jurisdiction on account of bankruptcy or an offence committed under an enactment,” he said.

He said the resolution of the UT Bank and the Capital Bank were in response to reported breaches of an enactment, which enactment was referred to as Act 930 by BOG.

“Yet, it is on record that the ADB Board, chaired by Mr Alex Benarsko, a former director of the UT Bank, has not been approved by the Bank of Ghana. The board, however, was inaugurated on the authority the finance minister in blatant violation of Section 58(d) of Act 930, three ‘unfit’ persons sit on the ADB Board,” he noted.

“The board chair, Mr Alex Benarsko, was a director of UT Bank prior to its collapse in 2017. The current Managing Director, Dr John Kofi Mensah is also a former MD of the Capital Bank. In fact, Dr Mensah has been sued by the Receivers of the Capital Bank to pay back GH¢15.7 million that he is believed to have misappropriated to himself while serving as MD.

Also, a former Secretary to the board of the UT Bank, Madam Mary Abla Kessie, is now a director of the ADB Bank. In effect, three persons, who are not fit and proper, according to the Bank of Ghana’s own rules sit on the board of the ADB Bank, a bank that is 60 per cent owned by the Central Bank,” he added.