President of Groupe Ndoum, Dr Papa Kwesi Ndoum, has alleged that the financial difficulties which eventually led to the collapse of GN Bank began after the government terminated contracts financed by the bank following a review initiated by the New Patriotic Party (NPP) administration in 2017.

Speaking on JoyNews’ Newsfile on Saturday, Dr Ndoum said GN Bank had been financing several government projects successfully before the change in government.

According to him, the NPP administration ordered a review of a number of contracts after assuming office in 2017.

He claimed that although the review did not uncover any fraudulent activity, several contracts were subsequently terminated, leaving substantial unpaid Interim Payment Certificates (IPCs) owed to contractors and financiers.

Dr Ndoum stated that the unpaid IPCs amounted to about GH¢300 million and significantly weakened the bank’s financial position.

“It is not a secret that in 2017 a lot of contracts were put on hold for the government to review and conduct whatever investigations they wanted to conduct, and that had a significant impact not only on the contractors but also on the entities financing them,” he said.

“We had been financing contracts for seven years, and we financed about GH¢10 billion worth of contracts, which we selected very diligently and specifically.”

“Normally, what happens is that after the review, the government proceeds to pay. But this time around, although the contracts were reviewed and were not deemed fraudulent, they were not paid. We had over GH¢300 million in unpaid IPCs alone,” he claimed.

Dr Ndoum argued that the unpaid amounts formed the basis of GN Bank’s financial challenges, which eventually led to its downgrade from a universal bank to a savings and loans company and the subsequent revocation of its licence.

“So if that money — just the IPCs — had been paid, we would not be having the conversation we are having now. We would not have had to be reclassified as a savings and loans company in the first place,” he added.

The comments come days after Groupe Ndoum secured a legal victory in its long-running dispute over the revocation of the licence of GN Savings and Loans.

Dr Ndoum maintained that the government still owes the group the outstanding IPC payments and suggested that the failure to settle the amounts played a major role in the financial difficulties experienced by GN Bank and related businesses within the Groupe Ndoum conglomerate.