The Bank of Ghana has rejected viral claims, GN Savings and Loans company collapsed because government failed to pay debts it owed the company.

Deputy Director of Banking Supervision at the Bank of Ghana, Elliot Amoako said it is other companies within Groupe Nduom which owed the now defunct institution.

Chairman of Groupe Nduom, Dr. Paa Kwesi Nduom who is a celebrated entrepreneur and a three-time presidential candidate has lamented government’s indebtedness caused his subsidiary’s demise.

The Groupe is at loggerheads with government over the size of the debt. The Finance ministry has said government owes Groupe Ndoum ¢30million. But the conglomerate puts the debt at ¢300million.

Groupe Nduom has said one of its subsidiaries, Gold Coast Securities, is owed ¢2.2billion after financing several infrastructural projects.

Explaining matters, Elliot Amoako told the Joy FM Super Morning Show, GN Savings & Loans (formerly GN Bank) was used to finance its sister companies within Groupe Nduom.

Photo: Dr. Paa Kwesi Nduom was a presidential candidate of a party he founded

Some figures released by the central bank showed that then GN bank put more than ¢761million into sister companies Ghana Growth Fund and Gold Coast Fund Management Limited.

It was these affiliate companies which made ‘risky’ investments with government leading to unpaid debts, he told Malik Abass Daabu.

He said these affiliates should have balanced their risk-taking without exposing depositors and their clients. It is the failure to do so that has indirectly affected the cash cow – GN Savings & Loans.

The Bank of Ghana, he explained, sympathised with GN Bank which was why it was downgraded to a Savings & Loans company in January 2018.

This was to allow the downgraded entity to resolve its debt problems directly with its affiliates and indirectly with government but GN Savings & Loans has not been able to do so, Elliot Amoako said.

Photo: Elliot Amoako 

The central bank, he said, has a duty to protect depositors who had been frustrated with GN Savings & Loans inability to honour its obligations. The required minimum operating capital of 15m cedis had been impaired, the top official explained.

Its Capital Adequacy Ratio (CAR) which indicates a company’s ability to meet is financial obligation had reached -61%, in breach of the minimum required of 13%, the central bank has said.

The revocation of the licence was important to protect depositors, the deputy Director at Bank of Ghana stressed.

Elliot Amoako also faulted the business model of Groupe Nduom in using depositors funds at erstwhile GN bank to finance its other companies. It is “problematic”, he said, describing it is bad governance frowned upon by Ghana’s banking norms.