The New Patriotic Party government, led by President Nana Akufo-Addo, has vandalized the banking laws of Ghana to secure money to enable it to sponsor ambitious campaign promises.
To enable the government to carry out the ‘one district one factory’ and the ‘Planting for Food and Jobs’ programs, the NPP government has borrowed a whopping Ghc900million from the Universal Merchant Bank and the Agricultural Development Bank respectively.
And the government did so without the approval of Boards of the banks as required by law.
Hon. Isaac Adongo, Member of Parliament for Bolga Central, yesterday told Accra-based ‘Radio Gold’ that the drains on the two banks amount up to the capital requirements needed to set up four banks and that it could collapse the two banks.
“Now let’s ask the Bank of Ghana, didn’t they hear that ADB, without a Board, committed Ghc450 million to support the planting for food and jobs program? So are they waiting for ADB to collapse before they come and tell us Ghana Commercial Bank should take over?
“They don’t have a Board, so how did they approve the Ghc450million they have given to government; Ghc450million is the equivalent of minimum capital required for two banks. What is the capital of ADB that they have taken people’s deposits and given Ghc450million to government without a Board approval?” Hon. Adongo asked on Radio Gold yesterday.
In the case of the Universal Merchant Bank, he said the $100million that the UMB recently committed to the one district, one factory program, had also been done without Board approval
He said the Board did not approve because the Board is not in place at all.
“The Universal Merchant Bank, recently committed $100million … about Ghc450million, the equivalent of two banks’ minimum capital is being given to government in the name of one district, one factory. They don’t have a Board!”
He expressed shock that the illegalities at both UMB and the ADB are going on right under the nose of the regulator, Bank of Ghana, because the BoG is complicit in the government’s wanton vandalism of laws that has seen the use of the GCB to acquire two collapsing banks, UT and Capital, without recourse to shareholders.
“…And the regulator, Bank of Ghana is watching, for UMB to collapse, then it will give it to Ghana Commercial Bank,” Hon. Adongo fired.
He lamented that the Ghc450million each that the UMB and the ADB have doled out to the government is the minimum capital requirement that a bank needs in order to set up.
Therefore in the wake of banks collapsing under the Akufo-Addo government, he said it was reckless that the government would literally borrow dry the two public banks just to fulfill ambitious campaign promises. And do so without the approval of a Board as required by law.
Meanwhile, Hon. Adongo has also pointed out that Finance Minister, Ken Ofori-Atta, who seems to be deeply involved in all the illegalities in the banking sector, broke the law with transactions involving his known private company, Enterprise Group, as well.
He said Enterprise’ recent acquisition of a new strategic partner, Black Star Holdings, and the shedding off of an old partner, Sanlam, vandalized Securities and Exchanges Commission law, because the SEC does not have a Board and therefore did not exist to approve of the deal as required by law.
In June, this year, Black Star Holdings Limited (BSI-IL), a wholly owned subsidiary of LeapFrog Strategic African Investments (LSAI), acquired stakes in three subsidiary companies, namely Enterprise Life, Enterprise Insurance and Enterprise Trustees.
The acquisition saw Black Star Holdings pump $180million into Enterprise Group which then paid off its old partner, Sanlam Emerging Markets Proprietary Limited of South Africa (Sanlam), with $130million.
But Hon. Isaac Adongo cast aspersions on the deal as he said Black Star is linked to a Finance Minister Ken Ofori Atta’s Deputy at the Finance Ministry.
“Only recently, his Enterprise Group, without the Board of the Securities and Exchanges Commission, how did they clear the 40% acquisition by the new shareholders the company that happens to be founded by his own Deputy Minister? When Sanlam bought 40%, it was worth only 21 million dollars 4 years ago over 4 years Enterprise Insurance has now grown to the extent that its share 40% of its value is almost 3, 7 times an increase, is that possible?”
Hon. Adongo also pointed out that the deal had not received SEC approval, which makes it dubious.
“In any case, have you had the Securities and Exchanges Commission clear such a transaction?
“The implication of that is that if you are holding a stock of Enterprise at the stock exchange at Ghc2 and it is now being sold at almost three, seven times so, it means that your stock on the stock exchange has been undervalued and therefore putting pressure on people to rush for Enterprise Insurance shares and for which reason Enterprise Insurance will now begin to see an increase in the price of their share, not reflected by the fundamentals of the performance of the economy but by a manipulated process outside of the trading regime without clearance from the Securities and Exchanges Commission. That is what they just did.”
He also accused the Finance Minister of violating corporate laws at the Agricultural Development Bank, where he arrogated powers to himself to appoint a new Managing Director without recourse to the bank’s Board and now is using his puppeteer influence on the MD to give out a hefty loan to a crony company.
McDan Shipping, he revealed, has landed a fishy contract with the Ghana Cocoa Board (COCOBOD) and been given money by ADB, at the order of Ken Ofori-Atta, so McDan can secure the shady contract.
Incidentally, the new ADB MD, Dr. Kofi Mensah, is a former MD and shareholder of the collapsed Capital Bank that Hon. Adongo said the BoG is buying off to enable such shareholders recoup investments they should have lost.
“The new Managing Director of ADB appointed, how did Bank of Ghana clear that Managing Director when he was the Managing Director of Capital Bank that has just collapsed?. What was the due diligence that Bank of Ghana did on this individual to clear him when he has just collapsed another bank?
“The Minister of Finance issued a letter to the Managing Director of ADB to grant Ghc10million to Mc Dan to allow McDan to finance a contract with COCOBOD. Is the Minister of Finance the Board of ADB? Again the regulator, Bank of Ghana, is watching until ADB goes down.”