Graphic Business News

Culprits in banks’ collapse...Reluctance to prosecute bad precedent— Ishmael Yamson

By: Maxwell Akalaare Adombila
 Ishmael Yamson
Ishmael Yamson

THE country is setting a bad precedent in the fight against corruption by failing to prosecute persons and institutions suspected to have caused the collapse of nine banks over a period of 17 months, a management consultant and retired Board Chairman of Standard Chartered Bank Ghana Limited, Mr Ishmael Yamson, has said.

The delay and ongoing silence on the matter gives the impression that there was nothing wrong with the government using taxpayers’ money “to pay for private sector malfeasance,” he told the GRAPHIC BUSINESS in an interview.

“So, I think that the earlier action was taken, the better it will be for the credibility of this country and the fight against corruption.

“If not, then we have no credibility to talk about corruption because you, the government, have gone to take the taxpayers’ money to pay for private sector malfeasance and you think that there is nothing wrong?” he asked.

“What signal are we sending out there when we wake up every day and say we are fighting corruption? This is a live case,” he said.

Reforms exercise
In April 2017, the central bank commenced a major clean up of the banking sector, which it said was needed to pull weak and contagious banks out of the system to help create a robust financial sector that inspires customer confidence and aids economic growth.

The now defunct UT and the Capital banks became the first casualties of the exercise, when in August 2017, they lost their licences to what the central bank described as gross breaches of the Banks and Specialised Deposits-Taking Act (Act 930) 2016 – the law governing the operation of banks in the country.

By January 2019 when the exercise had ended, seven more banks were collapsed in similar fashion and a total of four public bonds with a face value of GH¢10.25 billion were issued to cover the gap between the assets and the liabilities inherited by the GCB Bank and the Consolidated Bank Ghana Limited (CBG) – the new lender that was incorporated in August 2018 to absorb the resolved banks.

Other money drawn from the public purse were also used to fund the incorporation of CBG and other expenses related to the exercise.
The finance minister, Mr Ken Ofori-Atta, has said that the exercise cost the country around GH¢13 billion – minus interest.

Money recovered
Throughout the process, BoG continued to cite poor corporate governance and regulatory forbearance as factors that combined to weaken the banks and made them unfit to continue in operation.

The cost of the exercise, its impact on jobs and the contagion on the financial sector led to a public uproar on the need to punish persons involved in marginalising the collapsed banks.

Since then, not a single individual or institution has been prosecuted, apart from the counter suits between the directors and the receivers of the collapsed banks.
BoG Governor, Dr Ernest Addison, said last month that about GH¢500 million had been recovered by the receivers, PwC and KPMG.

He, however, lamented that the whole process “was not going on well”, given the lack of urgency on the part of the receivers, the delay and the silence around it.
He said he had had to “literally” push PwC to publish list of defaulters as well as recover funds owed to persons and institutions.

He added that he would have to do same in the case of KPMG, who are receivers for seven of the banks.

‘People are untouchable’
Mr Yamson, who had earlier encouraged the Bank of Ghana (BoG) to take tough and decisive actions against erring banks, said the lack of urgency in getting the suspected offenders punished – almost two years after the reforms took their first casualties – fuels the perception that “these people are untouchable.”

“That is the impression we are creating,” he told the GRAPHIC BUSINESS in a chat that discussed the banking sector clean-up exercise, the recent exit from the extended credit facility programme (ECF) with the International Monetary Fund (IMF) and how to develop leaders with integrity for businesses.

“At least prosecute so that the courts will look at the hard facts and if people are found not to have done anything wrong, then the courts will say ‘you did nothing wrong, go home.’

“Until you do that, everybody feels that nothing will happen to these people because they are all untouchable,” he said.

Who’s delaying?
While asking for clarity on the delay in  prosecuting offenders, Mr Yamson said the public deserved some explanation on the entire process.

“Who is delaying the prosecution? The central bank did their report and gave it to the security agencies and that means the central bank has finished their work because it is not a prosecution agency.

“So, between the Economic and Organised Crimes Office (EOCO), the Attorney General and may be the Special Prosecutor’s Officer; what is the cause of the delay?
“In any case, why are they not telling Ghanaians the cause of the delay?

“It cannot be that because you have borrowed money to pay, it is enough; it cannot be enough. People should be prosecuted,” he said.