Prominent Ghanaian lawyer, Sam Okudzeto, is calling on the state to extend prosecution of individuals complicit in the banking sector challenges to officials of the central bank.

The respected member of the Council of State believes that officials at the Banking Supervision Department of the Bank of Ghana (BoG) should be held responsible for the various banking regulation breaches by the collapsed banks.

“If they [BoG officials] were doing their homework and checking the [the collapsed] banks carefully, they would have seen what was going wrong and they would have reported to the Governor or the Board [of the BoG] to take a decision.

“And of course if the Governor himself has connived in the matter, then, of course, he also should be held responsible,” he said Wednesday on Upfront, a current affairs programme on Joy News channel on MultiTV.

His comments come on the back of a suit against the founder of defunct Capital Bank, William Ato Essien, and three other persons over the collapse of the local bank.

They have been charged by the state with 26 offences for their roles leading to the collapse of the bank in 2017.  

Fitzgerald Odonkor, the former CEO of the Bank; Dr Tetteh Nettey, owner of MC Management Services Ltd and Kate Quartey-Papafio, CEO of Reroy Cables Ltd, have been cited by the Attorney-General at the Accra High Court.

The charges include conspiracy to steal citing Mr Ato Essien and Tettey Nettey acting together between October and November 2015 in Accra to steal ¢100 million belonging to Capital Bank.

There was also the charge of abetment, which cited Mr Odonkor, assisting Mr Ato Essien and Mr Nettey, to dishonestly appropriate Capital Bank’s ¢100 million between the same timeline.

The four were also cited for laundering money between October and November in 2015 in Accra as they converted GHS100 million knowing it was proceeds of crime.

The charges have been hailed by some as a step in the right direction because it will ensure that willful abuse of depositors’ funds if so determined by the court, will be punished.

Capital Bank collapse

Capital Bank was among some seven local banks whose licences have been revoked for being highly insolvent.

According to a BoG report, top executives of the bank were a party to the misuse of liquidity support given the bank.

The report cites an emergency board and Executive Committee meeting on October 13, 2015, which notes concern with how the GHS 610 million liquidity support to the struggling bank was being used.

Instead of using the money the central bank gave the Capital Bank as liquidity support for the bank's business, the management with the approval of the Board Chair, diverted the money for other uses, leading to the eventual collapse of the Capital Bank in August 2017.

The monies were moved by a member of the Board, Ato Essien, into companies believed to be owned by him and others. Some of that money was reportedly presented as capital to secure a license for another collapsed bank, Sovereign Bank.

Among the flagged transactions were GHS27.5 million used for business promotion and handled by a board member; transfers to IFS amounting to GHc 23.9 million, transfers to Nordea Capital amounting to GHc 65 million, and transfers to Alltime Capital amounting to GHS130 million.

Retrieve monies

Mr Okudzeto also said on Upfront that he expects that the clean-up process and the suits against directors of the bank for alleged banking regulation infractions will result in the retrieval of substantial monies lost to the crisis.

“We should be able to retrieve every state money that has gone out; we should be able to recover them. Because these monies must have been invested in institutions or there is something we call tracing order. There is a tracing order whereby we can find out where the money went. And if the money went to family, friends, relatives and the rest of them; the companies that have been formed, the assets that have been acquired. All of them can be seized by order of the court to compensate the state,” he said.

Watch the full interview below.