Mr Johnson Amoah, a financial analyst, has stated that the Bank of Ghana (BoG) had solid reasons for revoking the licenses of Heritage Bank and others during the central bank’s clean-up operation.
He explained that the BoG provided sufficient justification for the bank’s actions.
“I’ve heard that the BoG was ordered to liquidate Heritage Bank. People are raising concerns about the Bank of Ghana’s decision, but in my opinion, the Bank of Ghana had sufficient reason to close the bank.
“The reasons were clearly stated by the Bank of Ghana, and I believe they make sense,” he wrote.
The regulator came under section 16 (1) (a) (7) and (8) of Act 930, the Bank of Ghana may revoke a licence and appoint a receiver under section 123 of the Act where it is satisfied that an applicant provided false, misleading, or inaccurate information in connection with the application for a licence or suppressed material information, and may revoke the licence of the bank without notice in cases of emergency, or in the public interest, to revoke the licence of Heritage.
Furthermore, sections 9 and 12 of Act 930 empower the Bank of Ghana to revoke a license if it believes that significant shareholders of a bank are unsuitable.
The following are the grounds for revocation of the license: The bank’s capital appears to have come from suspicious sources. Each Heritage shareholder had to demonstrate their “ability to subscribe to the shares” of the bank in their application for a banking license. The Bank of Ghana is not satisfied that the bank’s original sources of capital are acceptable under section 9 (d) of the Banks and SDI Act, 2016 (Act 930) and section 1 of the Anti-Money Laundering Act of 2008 (Act 749), which require acceptable capital to be obtained from lawful and transparent sources.
Specifically:
Heritage’s promoters provided evidence to the Bank of Ghana during the application for a banking licence that a total of GHC120.6 million was lodged with a local bank. Agricult (a company wholly owned by Seidu Agongo, a promoter of Heritage) transferred GHC120 million to the bank, which funds appear to have been derived from contracts awarded to Mr. Agongo by COCOBOD and are currently the basis of criminal prosecution in the High Court of Ghana.
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While Mr. Agongo claimed that proceeds from a USD 19.25 million contract with COCOBOD were used to fund the bank, subsequent investigations by the Bank of Ghana revealed that no such contract existed between COCOBOD and Mr. Adongo. However, one or more contracts were executed between COCOBOD and Sarago Limited (“Sarago”). Documents submitted to the Bank of Ghana for the bank’s licensing made no mention of the contract between COCOBOD and Sarago, nor of Mr. Agongo’s ownership of Sarago (also a shareholder of the bank).
According to the bank’s 2017 audited financial statements, an amount of GHc15.8m was transferred to the bank from an unnamed investor and attributed to unpaid called-up share capital, raising the question of whether the bank’s minimum capital was fully paid up at the time of licensing.
According to the same financial statements, an operating loss was recorded, resulting in a GHC 20.6 million shortfall in the bank’s capitalization.
This was supposed to be repaid by an unnamed shareholder by transferring fixed assets (branches) to the bank. Despite efforts by the Bank of Ghana to confirm the identity of the unnamed shareholder, (ii) the basis of valuation of the fixed assets, and (iii) whether the terms of the transactions were at arms’ length, the Bank of Ghana was unable to confirm any of the above.
His remarks come as the Chief Executive Officer of the now-defunct UT Bank, Mr Prince Kofi Amoabeng, has stated that the BoG was ordered to liquidate the bank.
On Tuesday, October 4, Accra-based CTV reported that Mr Amoabeng said, “I was pained by the collapse of Heritage Bank because it was young.”
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