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General News of Thursday, 10 October 2019

Source: Graphic.com.gh

Ato Essien, 3 others on trial for Capital Bank collapse

The Attorney-General has charged a former Chief Executive Officer (CEO) of the defunct Capital Bank, William Ato Essien, for his alleged role in the collapse of the bank.

In its first criminal action to hit a top executive of one of the collapsed banks, the A-G has levelled 26 charges against Essien and three former executives of the defunct bank —Fitzgerald Odonkor, Kate Quartey-Papafio and Tetteh Nettey.

The charges, as filed at the Accra High Court, include conspiracy to steal, stealing and money laundering.

It is the case of the A-G that the three accused persons stole, conspired to steal or laundered more than GH¢220m belonging to the bank.

Civil action

In November 2018, the receivers of the collapsed bank, Mr Vish Ashiagbor and Mr Eric Nipah, both of PricewaterhouseCoopers (PwC), instituted a civil action against Essien and 13 shareholders and directors for allegedly engaging in acts that led to the collapse of the bank.

The suit was filed at the Commercial Division of the Accra High Court.

The plaintiffs are seeking to use the legal action to recover over GH¢837 million, being what they said were loans that the shareholders granted to themselves which remained unpaid.

By their alleged actions, the plaintiffs said, the defendants “have breached their fiduciary duties under the Companies Code, 1963 (Act 179) and have caused serious financial loss to the bank’’.

Revocation of licence

On August 14, 201, the licences of the Capital and UT banks were revoked by the Bank of Ghana (BoG) after it had declared them insolvent.

The BoG allowed the state-owned bank, GCB Bank, to acquire the two banks in order to protect depositors’ funds and also enable them to stay afloat.

The hurricane that swept through the banking industry due to the collapse of the two banks further heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity known as the Consolidated Bank.