travesty of justice - starr fm · the tragedy of unibank ... nous banks, unibank, was actually...

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JUNE/JULY 2020

Travestyof justice

Ghana

How dirty politicskilled uniBank to

bring Kwabena Duffuor down

Ken Ofori-Atta Ghana’s economic ‘magician’ who got

away with fraud

Coronaviruspandemic

Africa takes a hit

Special RepoRt

Ghana

TRAVESTYOF JUSTICE

How dirty politics killed uniBank

46 June/July 2020 l africawatch

Not many people know about the dirty behind-the-scenes politics that led to the collapsein August 2018 of one of Ghana’s largestindigenous banks, uniBank. A bank that hadbeen going strong for the previous 16 years,uniBank’s troubles began only 7 monthsafter President Nana Akufo-Addo came topower in 2017. Just a year later the bank

was dead, killed through an orchestrated and combined action bythe Ministry of Finance, headed by the president’s cousin, KenOfori-Atta, the Bank of Ghana (the nation’s central bank) and theOfficial Administrator/Receiver appointed by the Bank of Ghanafor uniBank.

Apparently the government was targeting uniBank’s majorityshareholder, Dr. Kwabena Duffuor, the financial magnate fromKumawu in the Ashanti Region, who once served as the Governorof the Bank of Ghana and later the Minister of Finance under thelate President John Atta Mills, and belongs to the main oppositionNational Democratic Congress (NDC). In the process of takingDr. Duffuor down, the government collapsed uniBank.

During this operation, the government broke almost all the lawsthat govern the banking sector in order to get its way, causing theAttorney-General’s Office to rebuke such blatant disregard of thelaw in a January 2019 letter it felt compelled to write to the

Ministry of Finance regarding these actions. In that bombshellletter, Ofori Atta’s subordinates were instructed to keep itscontents “under wraps” – but it leaked nonetheless.

What is worse: The government could have saved uniBank if itwanted, but clearly chose not to.

Without even using taxpayers’ resources, the government couldhave stopped uniBank from going under by simply paying the bankabout GH¢1.0bn that the government and its related entitiesalready owed uniBank. But Ofori-Atta would not pay this indebt-edness to uniBank, and instead the Ministry of Finance andthe Bank of Ghana combined their powers to use the availableinsolvency laws to kill uniBank, even though the Ministry ofFinance, the Bank of Ghana and the government itself owed uni-Bank nearly a billion Ghana cedis, which, had it been paid, wouldhave saved uniBank without needing any other assistance fromthe government.

But that would have defeated their clandestine mission to killthe bank and destroy the reputation of its majority shareholder,Dr. Duffuor.

This is the harrowing story Africawatch reveals on the followingpages. It is a tale that brings no honor to Akufo-Addo’s government,and especially its Enforcer-in-Chief, Ken Ofori-Atta. It is a storyof sheer dirty politics, the type that causes no nation to prosperand allows no citizen to stand proud.

The tragedy of uniBank... and the targeting of Dr. Kwabena Duffuor

A branch of uniBank Ghana which was closed down by the government on August 1, 2018.

Special RepoRt uniBank

africawatch l June/July 2020 47

Dr. Kwabena Duffuor, the majority shareholder of uniBank.



Documents that have recentlycome into the possession ofAfricawatch prove that oneof Ghana’s largest indige-nous banks, uniBank, wasactually destroyed on politi-

cal grounds simply because the majorityshareholder of the bank, Dr. KwabenaDuffuor, the former Governor of the Bankof Ghana and later Minister of Financeunder the late President John Atta Mills,belonged to the main opposition party.

Otherwise, the bank could have beensaved, and in fact deserved to have beensaved, by President Nana Akufo-Addo’sgovernment. But because Dr. Duffuor be-longed to the opposition National Demo-cratic Congress (NDC), his bank had todie, deliberately killed by the ruling NewPatriotic Party (NPP) government for thesake of politics! And all this played outunder the keen eyes of the president’scousin, Finance Minister Ken Ofori-Atta,who, with the active assistance of the Bankof Ghana (BoG), dealt uniBank a sleight ofhand and then buried it.

Sadly for Ghana, in the rush to killthis bank, Akufo-Addo’s government, rep-resented by the Ministry of Finance andthe BoG, consciously broke almost all thelaws governing the banking sector justso they could dispatch uniBank intothe netherworld with ease, if not withimpunity.

How uniBankwas killed

Throughout this in-depth report,

Africawatch reveals how the

clandestine mission by the

government to kill uniBank

actually unfolded. We take

readers through the destructive

actions undertaken by the

Ministry of Finance, headed by

Ken Ofori-Atta, the Bank of

Ghana, led by Dr. Ernest Addison,

and the Official Administrator/

Receiver, KPMG, headed by Nii

Amanor Dodoo, and show how

they all knowingly colluded to kill

one of Ghana’s most promising

indigenous banks.

UniBank, a successful indigenous bank, which was shut downby the NPP government, apparently because its majority

shareholder belonged to the main opposition political party.


Even the Office of the Attorney Generaland Ministry of Justice, headed by anotherof Akufo-Addo’s relatives, Gloria Akuffo,found the unlawful actions of the Ministryof Finance and the BoG so shocking that itsent a 11-page letter on January 25, 2019,to Ofori-Atta, rebuking the actions taken toclose down uniBank (see story on page 68).

This is a story that brings no honor toGhana’s current government, especiallyhow the government itself, the Ministry ofFinance, the central bank, and the manyquasi-government entities which owed uni-Bank about GH¢1 billion would not paytheir indebtedness to help the bank stayafloat. It was callousness writ large, andwhoever benefitted from that callousnessonly Ofori-Atta can tell – because he had inhis gifts the power and resources to stopuniBank from going under, but he chose notto do it.

Worse, the Official Administrator andlater Receiver appointed by the BoG to han-dle the uniBank matter, the internationalaccounting firm KPMG, behaved as thoughit was part of the staff of the Ministry ofFinance, if not the errant BoG, and thushelped to hasten the end of uniBank in-stead of saving it, as KPMG was actuallymandated to do.

KPMG’s role in the affair so shocked theuniBank shareholders that they still insistthat Nii Amanor Dodoo, the KPMG officialwho acted as the Official Administrator foruniBank and was later made Receiver, was“illegally appointed” by the BOG. “Was thisappointment a reward for carrying outBoG’s agenda?”, the shareholders ask.

According to the shareholders: “Whatwas also not made known to the public wasthat the BoG and Nii Amanor Dodoo will-fully failed to comply with Section 122(8) ofAct 930, which prevented Nii AmanorDodoo from holding any office in a bankwhich had undergone official administra-tion, for a period of at least two years.How could such a monumental breach ofthe law occur if not as a result of a deliber-ate and brazen plot to cover up any ‘lapses’that may have occurred on the part of theOfficial Administrator during his tenure?”

In the beginning

The story starts on August 1, 2018 whenthe BoG revoked the license of uniBankGhana Limited and by that act killed avision that was birthed in 1997 by Dr.Kwabena Duffuor and his partners tocreate a pan-African bank in Ghana to helpfund the economic aspirations of not onlyGhana but the African continent as awhole.

Before the bank was brutally closed

down, it endured what the bank’s share-holders call “unprecedented, unreasonable,unjustified, unannounced and unilateralaudits, downgrades and impairments of itsloan book and other assets, including evengovernment, quasi-government, Ministry ofFinance and Bank of Ghana exposures.After the indecent collapse of the bank,it became clear that these deliberate andcalculated audits of the bank’s operationsand the downgrades of its assets were doneto drive it further into the abyss of insol-vency and provide grounds for the targetedrevocation of the licence.”

That action by the BoG ended an illus-trious 18-year history that began on Feb. 3,2000, when uniBank received its universalbanking license from the BoG and com-menced operations in 2001 with an initialstated capital of GH¢870,000.

After using the first few years to stabi-lize, uniBank experienced exponentialgrowth over a 10-year period, between 2006and 2016, and became a major fixture of theGhanaian banking sector.

UniBank was flying. From 2006, thebank’s stated capital increased from amere GH¢7m to GH¢295m in 2016. Totaldeposits jumped from GH¢25.10m in 2006to GH¢2.62bn in 2016. Loans and advancesincreased from GH¢15.72m in 2006 toGH¢2.88bn in 2016. Total assets increasedfrom GH¢37.25m in 2006 to GH¢5.74bn in2016. The future was bright for uniBank,and nothing in its stars showed that justtwo years from 2016 this prosperous indige-nous bank would be dead … and buried!

But the undertakers involved had differ-ent plans. The year 2016 happened to bethe year the NPP won both the presidentialand parliamentary elections with a land-slide and took office on January 7, 2017.Then things soon changed for uniBank.

Here was a bank that had distinguisheditself in the areas of customer service anddigital banking. Its huge investment in IThad paved the way for improved servicesand the delivery of top-notch bankingto over 400,000 customers in 54 branchesnationwide.

Among Ghana’s new breed of banks, uni-Bank was way ahead of the competition.With the right structures in place – compe-tent and highly-motivated staff, sophisti-cated infrastructure and a good brand –uniBank doubled down on its growth and inthe process built a Ghanaian brand thatwas comparable to its peers in the WestAfrican subregion.

A leading indigenous lender, uniBankbecame one of the few banks to supportthe government’s development initiativesby financing mainly the consumer andsmall/medium enterprises (SMEs) sectorsof the economy. Consequently, its loan bookincreased from GH¢220.6m in 2010 toGH¢536.2m by the end of 2012. Loan re-payments were good, and asset qualityequally so. Ironically, uniBank’s success insupporting the government’s developmentinitiatives sadly became its downfall.

Government indebtedness

Starting from 2013, uniBank embarkedon an aggressive financing of governmentand quasi-government projects, especiallyin the energy and construction sectors.Bulk Oil Distribution Companies (BDCs)became some of the major borrowers fromuniBank. Thus, total loans and advancesincreased from GH¢825.3m in 2013 toGH¢2.88bn in 2016.

However, from 2013 onwards, the gov-ernment and quasi-government customerscould not make their repayments on time touniBank because the government, thenunder the NDC’s President John Mahama,was experiencing severe cash problems andtherefore could not pay government con-tractors on time to enable them to maketheir repayments to uniBank, which hadfunded their projects.

This resulted in severe liquidity short-falls and persistent clearing failures foruniBank. In the meantime, redemptionsand withdrawals started peaking, forcinguniBank to rely on daily borrowings fromother commercial banks, including liquiditysupport from the BoG, which attracted ahigh interest rate of 26% per annum.

The conundrum was that if the govern-ment contractors and quasi-governmententities had been paid what they were owedby the government as and when their pay-ments fell due, then uniBank could havecertainly prevented the daily clearingfailures that persisted and the rush ondeposit withdrawals.

As it happened, between 2013 and 2016,although uniBank’s clients were holdinggovernment receivables (Interim PaymentCertificates or IPCs) amounting to almostGH¢1.0bn, the government could still not


Before the bank was brutallyclosed down, it endured what the bank’s shareholders call “unprecedented, unreasonable,unjustified, unannounced and unilateral audits, downgrades and impairments of its loan book and other assets.”


pay the contractors and other clients toenable them to honor their obligations touniBank.

The delays in the payment of govern-ment-related exposures over this periodcompelled uniBank to rely on the BoG’sexpensive liquidity support, which, between2013 and 2016, cost uniBank an interestpayment total of almost GH¢948m.

Furthermore, the delays in repayment touniBank by government and quasi-govern-ment institutions led to non-performanceof the bank’s credit facilities, and hence adeterioration in the quality of its assets.

By the end of 2016, these delays hadbecome a major challenge not only for uni-Bank, but for the whole Ghanaian economy.The inability of the government to pay con-tractors and other entities had cascadedinto the whole economy and led to, in thecase of many banks, the non-performance ofloans and advances, causing serious deteri-oration in the quality of assets throughoutthe entire banking industry.

To resolve the problem, President JohnMahama’s government engaged the Inter-national Monetary Fund (IMF) to enter intoa coordinative arrangement with the Bankof Ghana (BoG) that led to the developmentof a strategic roadmap to strengthenGhana’s banking sector.

The cornerstone of that roadmap wasan Asset Quality Review (AQR) involvingall the banks operating in Ghana. It wasa special exercise to assess the quality ofthe financial exposures in the form of loans,advances and investments. The AQR wascompleted in March 2017 and identified 9banks as being undercapitalized, with anaggregate capital shortfall of about 1.6%of GDP.

Unfortunately, uniBank was amongthose 9 banks. The AQR result showed thatuniBank had a Capital Adequacy Ratio(CAR) of 4.71% by March 2017, instead ofthe mandatory 10%.

Therefore, in accordance with Section106(1) of the Banks and Special Deposit-Taking Institutions Act, 2016 (Act 930),uniBank’s management had to submit tothe BoG, within 45 days, a capital restora-tion plan and to rectify the significantundercapitalization within 90 days. It alsohad to restore the bank’s CAR to at leastthe prescribed minimum of 10% within 180days from March 20, 2017.

But on March 30, 2017, uniBank’s man-agement requested BoG’s Banking Super-vision Department (BSD) to conduct afurther review of some selected accountscovering the period up to December 31,2016, which were downgraded during theAQR exercise. This had become necessarybecause Ghana’s new government, headed


Dr. Kwabena Duffuor II, the CEO of uniBank and the son of the majority shareholder Dr. Kwabena Duffuor. They had to watch in agony as their once prosperous bank died a slow death at the hands of Akufo-Addo’s government.


by President Akufo-Addo and the Bank ofGhana, had taken over the debts of allthe Bulk Oil Distribution Companies(BDCs), while some of uniBank’s down-graded accounts had improved in terms ofloan classification and/or collateral securi-ties, and therefore they had been revaluedsince the conclusion of the AQR exercise.

The Banking Supervision Departmentobliged and conducted a review, whichreduced uniBank’s impairment figure byGH¢52,599,448.20 as a result of perfectedand revalued collateral securities. Accord-ingly, the BoG told uniBank in a report:“Our re-computation showed that yourbank is now undercapitalized with a Capi-tal Adequacy Ratio of 6.07% and a CapitalDeficiency of GH¢135,576,056.57 based onyour position as at 31 March 2017.”

Following the BSD review, uniBank’sshareholders injected the required capitaland restored the bank to a CAR of 10.70%within the timeframe stipulated by theBank of Ghana. Thus, by July 31, 2017, uni-Bank had a minimum paid-up capital ofGH¢370.13m, which was the highest in thewhole banking industry in Ghana.

With its income surplus standing atGH¢51.97m at the time, and a minimumpaid-up capital of GH¢370.13m, uniBankhad a total paid-up capital of GH¢422.10mwhen the two were summed up. The totalequity stood at GH¢500m, again one of thehighest in the industry at the time. Thus,uniBank was solvent by July 31, 2017.

The bank’s turnaround story was soevident that the BoG singled it out as beingamong three banks in a good position tomeet the GH¢400m capital requirement atthe time. Thus, for the shareholders, board,management and stakeholders of the bank,it was a relief that the bank had emergedfrom the AQR exercise stronger than beforeand it was now on its way to regaining itsspot as a formidable indigenous brandstrategically positioned to support thegrowth and development of the economy.

BoG’s role

At this point, most people believed thatthe objective of the roadmap implementa-tion exercise by the central bank was tostrengthen the capitalization of Ghanaianbanks. Unfortunately for uniBank, this wasnot to be. Events that unfolded after theAQR exercise showed that a grand andclandestine scheme to harass the bank wasjust beginning to unfold.

These events gave reason to believe thatthe roadmap implementation path chosenby the BoG for uniBank was not tostrengthen the bank but to drive it intoinsolvency at all costs in order to justify its

resultant collapse. Trouble started when the BoG singled

out uniBank for the high jump. All out ofthe blue, the central bank embarked on anunplanned monthly auditing (or on-site in-spection) of uniBank, with each one endingup in a massive downgrading of uniBank’sloan book.

The rule of thumb in Ghana’s bankingindustry is for every bank to be audited

once a year by the BoG. In the industryparlance, this is called a “planned audit oron-site inspection” by the central bank’sBanking Supervision Department (BSD).The date of the inspection or audit is alwayscommunicated well in advance by the BoG,and every bank knows when the centralbank auditors would arrive. Every bankgets a report from the BoG after the auditand the banks are obliged to act on their


Governor of the BoG, Dr. Ernest Addison – UniBank was killed under his watch, in a missionbelieved to have been sanctioned by his political bosses.


individual reports.In 2017, however, the BoG decided uni-

laterally to treat uniBank differently. Thebank’s planned audit was scheduled forMay 15 to June 21, and uniBank got itsaudit report on August 15. It showed thatthe bank’s CAR of 10.7% had fallen to8.24%, following the downgrading of someselected loans and advances by the BSDduring the audit.

As uniBank’s management was studyingthe BSD audit report with a view of findingthe necessary corrective measures, anotherBSD team of auditors arrived unannouncedin August to begin another audit. The teamwent on to downgrade the same credit facil-ities that the previous BSD team hadaudited and downgraded. This time theBSD team downgraded uniBank’s loan bookso massively that its CAR fell from 8.24%to 4.80%, meaning that within the monthof August alone, uniBank’s CAR had beenreduced by the BSD from 10.7% to 8.24%and again from 8.24% to 4.80%.

But worse was to come. In September2017, yet another BSD audit team arrivedunannounced to review the same accountsin an exercise the BSD called a “classifica-tion of loan sample”.

In this exercise, the BSD covered 87accounts (about 72% of uniBank’s total loanbook) and downgraded some more creditfacilities. This reduced the total paid-upcapital from GH¢422.10m to GH¢153.30m.Justifying this unplanned audit, whichclearly amounted to harassment, the BoGclaimed it was “due to losses being madein the current year. In spite of [uniBank]having the highest paid-up capital ofGH¢370.13m, [it] will still have to raiseadditional funds of GH¢246.80m to makeup for the shortfall arising from theirimpairment of capital,” the BoG said.

But this did not make much sense to uni-Bank. According to its management, “thiscomment was and is regrettable becausethe whole universal banking industry and,indeed all Ghanaians, were aware that uni-Bank was not a loss-making institutionuntil the BSD began their inexplicable on-site and unplanned monthly auditing anddowngrading of the same credit facilities. Infact, all these so-called losses were inducedby the BoG’s BSD.”

But more bad news was on the way. InOctober 2017, the BSD sent yet anotheraudit team unannounced to uniBank tocarry out further auditing and downgradingof the same credit facilities that had beendowngraded by the three previous BSDteams. This fourth unplanned audit wipedout uniBank’s entire paid-up capital ofGH¢422.10m and registered a huge loss inthe Income Surplus Account, sending the

CAR tumbling into the negative. In short, between May and October 2017,

the BSD sent 4 audit teams to uniBank – 3of them unannounced – to audit and down-grade the same loan book. This was un-precedented in Ghana’s banking history. Itwas clear that the BoG was on a mission,working on behalf of its political masterswho were determined to kill uniBank atany cost.

Curiously, the BSD’s fourth audit teamdowngraded even the government’s andquasi-government’s indebtedness to uni-Bank, which gave the impression that even

the whole Government of Ghana (GoG) wasinsolvent and could not be trusted to paythe debt it owed to uniBank.

At the time, the government and govern-ment-related entities owed uniBank atotal of GH¢868.974m, broken down into:Cocobod GH¢137,499,785.98. Ministry ofFinance GH¢223,049,048,72. Road FundGH¢229,434,748.82. GETFUND GH¢2,023,981.10. Bank of Ghana GH¢19,781,376.00.Bulk Oil Distribution Companies GH¢105,741,493.33. Other government contractorsGH¢52,889,558.49. Quasi-government enti-ties GH¢98,553,636.86.

This is the indebtedness that the BSD’sfourth audit team downgraded, causing adumbfounded uniBank management to say:“The regulator set itself on a pre-conceivedcourse to expropriate the property of theshareholders.” The BSD did not even botherto issue the normal audit reports after thethree unplanned audits of uniBank

Harassing a bank

Despite what clearly appeared to beharassment by the BoG, uniBank’s man-agement and Board continued to work hardin the very hostile environment causedby the BSD. Against all odds, by the endof December 2017, uniBank’s CAR had

improved dramatically to a positive 5.20%as a result of a GH¢60m capital injection bythe shareholders.

Confirming this in a letter dated Febru-ary 28, 2018, the BSD stated: “We havereviewed the prudential returns of yourbank for December 2017 in accordance withour duties and responsibilities under Sec-tion 3 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). Thereturns revealed a marked improvement inuniBank’s CAR within one month by12.28% from negative 7.08% recorded inNovember 2017 to positive 5.20% in Decem-ber 2017.”

But the BSD had bad news further onin the letter. Although uniBank’s CARhad improved between November andDecember 2017, the BSD said it had notedat the same time from the bank’s 2017returns that there had been “an increaseof GH¢760,675,826.23 in gross loansfrom the September 2017 position ofGH¢3,337,574,219.77 to the GH¢4,098,250,046.00 recorded in December 2017, in spiteof the directive from the Bank of Ghanato uniBank to cease granting new loansand advances, both funded and non-funded,except fully cash secured credit facilities”.

The BSD therefore requested uniBank toprovide a written response for discussionat a meeting scheduled for March 2, 2018.At the meeting, uniBank’s managementexplained that: “The increase in gross loansand advances from September 2017 to De-cember 2017 was not due to new advances.As mentioned in an earlier communicationto the BoG, we encountered some systemchallenges after migrating from Temenosbanking software R08 to R15. This affectedAA Contracts, specifically loans, depositsand borrowings, resulting in some customercontracts not reporting properly. Most ofthe issues, in consultation with Temenosconsultants, have been rectified, resultingin the increase in advances.”

The BSD refused to accept uniBank’sexplanation, and without any further inves-tigation or discussion with the bank’s Boardof Directors, the BSD cavalierly down-graded the whole GH¢760m.

“It had become clear at this stage”, asuniBank’s shareholders put it, “that theBoG’s Banking Supervision Departmenthad decided to operate outside the powersthey had under Act 930. Thus, througharbitrary impairments, inexplicable andunplanned auditing and downgrading ofvarious credit facilities, uniBank’s CAR hadreduced from positive 5.20% to negative24.02% at the end of December 2017 as aresult of the impairment of this huge figureof GH¢760m.

“This impairment by the BoG, on the


Between May and October2017, the BSD sent 4 auditteams to uniBank – 3 of themunannounced – to audit anddowngrade the same loanbook. This was unprecedentedin Ghana’s banking history. Itwas clear that the BoG was ona mission, working on behalfof its political masters whowere determined to kill uniBank at any cost.


basis of the claim that this was from thegranting of new loans between Septemberand December 2017, and the resultingfigures provided in a statement to the pressby the Governor of the BoG, were unreason-able acts of the central bank, contrary toArticles 23 and 296 of the Constitution ofGhana, and were designed to put uniBankout of business and wipe out the invest-ments of its shareholders.”

BoG’s aggressive monthly auditing anddowngrading even affected the GH¢1,338.90m that uniBank had provided for overand above the provisions made during theannual audit between May and June 2017.

“It was now clear,” say uniBank share-holders, “that the audits and downgradingof uniBank’s credit facilities by the BoGwere not only unlawful and in bad faith, butwere done with a view to putting uniBankout of business. How can a regulator impairits own exposure to a bank? What kind ofcentral banking logic allows this unethicalaction?

“By downgrading the exposures of theGovernment of Ghana, including validatedInterim Payment Certificates issued to con-tractors by the government, the BoG waspurporting to declare the Government ofGhana not creditworthy. The shareholdersmaintain that the BoG acted unreasonablyand ultra vires, contrary to their own pow-ers granted by Act 930.”

Letter of contention

Finally fed up, uniBank’s Board of Direc-tors wrote to the BSD on January 18, 2018,expressing deep concern about what the un-planned monthly auditing was doing to thebank. “It is crucial at this stage to drawyour attention to the fact that uniBankhad not been a loss-making institution untilthe BSD began their inexplicable on-sitemonthly auditing and downgrading of thesame credit facilities,” the letter said.

“It is also common knowledge that on-siteexamination by the BSD is conducted oncea year in each bank,” the letter continued.“However, in the case of uniBank, in addi-tion to the on-site examination which endedon 15 August, the BSD has had three addi-tional visits, all of which uniBank was notgiven reasons for.

“All these three visits were spent on au-diting and downgrading the same accountson which the earlier on-site examinationhad made provisions for. In effect, whatit means is that since August these sameaccounts have been downgraded four times.And the unfortunate aspect is that, thedowngrading even included governmentand quasi-government exposures to uni-Bank.”

The letter went on: “The unfortunatestory of uniBank needs to be told now! It isa story of a leading indigenous bank whichhad the highest paid up capital in theindustry with a CAR of 10.70% at the endof July 2017. A story of a bank that hadbeen featured twice as Ghana’s Sixth MostPrestigious Enterprise in both the 2015 and2016 ‘Club 100 Awards’, and yet has beenweakened in just three months through in-explicable auditing and downgrading of thesame credit facilities, including governmentand quasi-government exposures by theBanking Supervision Department of thecentral bank…

“It would also be relevant to point outthat the activities from 15 August to datewere all outside the ‘Examination Plan for2017’. These ‘off-examination plan for 2017’activities of BSD sent wrong signals to themarket and began to undermine the publicconfidence in uniBank. Therefore, since 15August 2017, the bank has been workingunder extremely strained conditions. It hasbecome even more difficult as the govern-ment has not been able to settle or pay the

already validated interim payment certifi-cates worth over GH¢800m to uniBank toimprove its liquidity.

“We wish to state that the shareholdershave no issue with accepting the provisionsarising out of the on-site examinationwhich ended on 15 August 2017. However,the shareholders wish to emphatically statethat they will not accept the additional pro-visions stemming out of the inexplicable,additional on-site examinations, contrary tostandard practice.

“This deviation from the norm with-out reason or explanation is totally un-acceptable. The shareholders would haveexpected that if some irregularities or in-consistencies were flagged up during theinitial on-site examination, a report wouldhave been prepared and discussed withthe management of the bank after whichanother examination could be undertaken.

“This was not done, yet three more exam-inations were conducted without evengiving uniBank the time to rectify all theconcerns raised in the initial report dated31 August 2017. We must state, that the


Sad end: A branch of uniBank which went under when its license was suddenly withdrawn.


only report we have received till date isthat dated 31 August 2017. No reports wereproduced for all the subsequent onsiteexaminations after which accounts weredowngraded, again a deviation from thenorm.

“In effect, we still stand by the officialreport dated 31 August 2017, and believethat uniBank will be able to rectify the con-cerns raised in this August 2017 report bythe time the BSD conducts the 2018 on-siteexamination. This has been the practicewhich the BSD has followed all these years.The Board has therefore instructed themanagement of the bank to henceforth relyon the 15 August 2017 BSD examinationresults as the basis for the preparation ofall their returns.”

The letter, which was addressed to theHead of the BSD Osei Gyasi, was signedby Prof. Newman Kwadwo Kusi for theuniBank Board Chairman.

It was copied to President Akufo-Addo’soffice, and additionally to Vice-PresidentDr. Mahamadu Bawumia; and to theMinister of National Security Albert Kan-Dapaah; to the Governor of the BoG Dr. Ad-dison; to the First Deputy Governor of theBoG Dr. Maxwell Opoku-Afari; to the Headof Research (BoG) Dr. Benjamin Amoah;

to the Head of Banking (BoG) Mrs. PeggyOsei-Tutu Dzodzomenyo; to the ActingHead of Financial Markets (BoG) StephenOpata; and finally to Dr. Kwabena DuffuorII, CEO of uniBank.

But nothing much came out of this widelycirculated letter. It was obvious that thepolitical godfathers had already decided thefate of uniBank, and whatever the bank didthenceforth was a lost battle.

Finally, after 12 days of the letter inits possession, the BSD found the grace torespond on January 30, 2018, explainingthat the BoG had taken the steps com-plained about by the uniBank Board, ie,downgrading uniBank’s loan book, because“after [the] completion of the AQR exercisein March 2017, it was determined that uni-Bank was significantly undercapitalizedwith a CAR of 4.71%”.

But the uniBank management deniesthis claim. “Indeed, this statement fromthe regulator was incorrect because boththe liquidity and solvency of uniBank hadimproved remarkably between May 2017and July 2017,” the management says. “Infact, both the BSD and uniBank knew thatbefore the end of the 2017 annual on-siteinspection, uniBank’s CAR was 10.70%.The minimum paid-up capital stood atGH¢370.13m and it was the highest mini-mum paid-up capital in the whole bankingindustry in Ghana. These were undisputedfacts that were alluded to by the BoG itselfas explained earlier.”

The BSD’s letter, signed by its ActingHead, Osei Gyasi, defended the threeunplanned audits of uniBank, saying “thefrequent on-site examination by the BSD toyour bank is not unconventional, but neces-sary due to the risks that uniBank poses tothe broader financial system. In any case,the BSD, and for that matter the Bankof Ghana is not precluded from conductingadditional or follow-up on-site examinationvisits on any bank or deposit-taking insti-tution. Kindly see Sections 94 and 95 ofthe Banks and Specialised Deposit-TakingInstitutions Act, 2016 (Act 930) on theconduct of examinations.”

But Osei Gyasi declined to name anyother bank, apart from uniBank, that hadever been given that rough treatment(three unplanned monthly audits), eventhough the law gives the BoG the right todo so.

The Official Administrator

As it were, on March 20, 2018, the BoGannounced via a press release that it hadappointed KPMG and its official NiiAmanor Dodoo as the Official Administra-tor (OA) for uniBank.

The BoG stated that it was acting underSection 107 and 108 of Act 930, and specif-ically emphasized the authority of theOfficial Administrator under Section 108as: “To exercise a variety of powers to reha-bilitate and return [uniBank] to regulatorycompliance within a period of six months,at the end of which the bank will be re-turned to private ownership and manage-ment.”

The BoG added that “during the period ofofficial administration of uniBank, the bankwill remain open for business under themanagement and control of KPMG over-seen by the Bank of Ghana, and is not beingclosed and liquidated”.

The central bank made it clear that ithad taken the action to put uniBank underofficial administration because the bankhad been identified after the Asset QualityReview in 2016 as “significantly undercap-italised with a CAR of 4.75%”. However, theBoG deliberately refused to disclose to thepublic that uniBank shareholders had alsoinjected additional capital, which had thenraised the CAR to 10.70% as at July 2017.

This implied that the BoG relied on the4.75% CAR for the uniBank roadmapimplementation exercise, and not the10.70% CAR to push the bank under officialadministration.

“It therefore appeared that the Bank ofGhana had set itself on a pre-conceivedcourse to put uniBank under an officialadministrator,” says uniBank’s manage-ment. “This explained the arbitrary and un-ethical actions taken by the BSD between15 August and 31 December 2017.”

Unfortunately for uniBank, the cominginto office of the Official Administratorbrought with it another round of a tortuousprocess for the bank.

As the shareholders recall: “Just twomonths on the job, which was meant to lastalmost 12 months, the Official Administra-tor unilaterally impaired almost the entireuniBank loan book, including government,quasi-government and BOG’s own receiv-ables, all valued at almost GH¢1.0bn. Otherattractive bank assets, including landedproperties, were also impaired unilaterally.

“The Official Administrator also refusedto consider the shareholders’ credible capi-talisation proposal from a first-class inter-national bank, which would have allowedthe OA to comply with Section 115 of Act930, and that would have spared the Statefrom jeopardising the lives of thousands ofGhanaians and spending billions of cedis tocontain the ripple effect of the withdrawalof the bank’s licence.”

The shareholders continue: “The truththat ought to be known by the Ghanaianpublic is that the Bank of Ghana relied on



a Draft Report dated 13 July 2018 byKPMG/OA with several caveats to revokeuniBank’s banking licence. A true accountof the situation exposes the deliberatesteps, from the onset, by the Bank ofGhana, through its Banking SupervisionDepartment and the OA, to weaken uni-Bank, ignore credible efforts by the share-holders to revive the bank, and ultimatelywithdraw its licence.”

Operational challenges

At the start of KPMG’s “official adminis-tration” of uniBank, the BSD’s ActingHead, Osei Gyasi, met the uniBank man-agement and made it clear that KPMG’sappointment was for an initial period of 6months but could be extended for a furtherthree months and yet another threemonths, making it 12 months in total.

Osei Gyasi again emphasized that uni-Bank was not under receivership, butKPMG had been appointed to assumeall powers, functions and responsibilities ofthe shareholders, directors and key man-agement of the Bank in accordance withSection 108 of Act 930 and, therefore, thecentral bank expected utmost cooperationwith KPMG.

The BSD Acting Head also noted that inaccordance with KPMG’s duties, it wasto ensure that uniBank became financiallyviable and then put on a recapitalizationphase with shareholders given the right offirst option.

“It was disclosed at this meeting,” sayuniBank shareholders, “that the bank’s sol-vency was negative GH¢551m, and thiswas due to the BSD’s monthly auditing anddowngrading of the loan book, including theinstant impairment of GH¢760.67m.

“As at 31 March 2018, uniBank cus-tomers’ deposits stood at GH¢4.28bn. By 31July 2018, the customers’ deposits had de-clined to GH¢3.5bn. The reduction of aboutGH¢780m in four months was as a resultof significant withdrawals by customersunder the new KPMG management. TheOA was unable to drive deposit mobiliza-tion which was critically needed for loansservicing.”

The shareholder went on: “Althoughthe Bank of Ghana’s Emergency LiquiditySupport for uniBank stood at GH¢2.2bnas at 30 March 2018, uniBank also hadliquid assets amounting to GH¢1.75bn withthe Bank of Ghana. These comprised ofTreasury Bills of GH¢633.5m; US dollardeposit balance equivalent to GH¢1,779m,and Interim Payment Certificates (IPCs orgovernment and quasi-government receiv-ables) of GH¢936.6m.

“It is pertinent to note that by 31 July

2018, four months after the Official Admin-istrator had assumed the management ofthe bank, uniBank’s solvency deterioratedfrom GH¢551m to negative GH¢1.45bn.

“Also, the Bank of Ghana’s liquidity sup-port to uniBank had risen to GH¢3.14bn injust four months under the Official Admin-istrator’s management, as compared toGH¢2.2bn reported on 20 March 2018 whenKPMG took over. This registered an in-crease of GH¢927.2m in just four months.

This huge increase was mainly due to thepanic withdrawals by customers as a resultof the management style.”

By April 2018, the total assets of thebank stood at GH¢8,747,835,609.58 com-pared to total liabilities of GH¢8,955,872,957.69. Strangely, the very next month,KPMG effected what the uniBank manage-ment calls “inexplicable and unilateral im-pairments of the bank’s loan book and otherassets”.

KPMG impaired GH¢3,082,005,927.55on the loan book, and even downgraded allthe government and quasi-government in-debtedness to the bank, amounting to aboutGH¢1.0bn, some of which had been issuedwith Interim Payment Certificates (IPCs)by the government.

“Although IPCs qualify as collateralunder Section 2.2.3 of BoG’s Guide forFinancial Publications for Banks for thepurpose of impairments or provisioning,”explains the uniBank management, “theOfficial Administrator ignored this and im-paired the whole government and quasi-government receivables.

“Interestingly, after impairing all these

receivables on 31 May 2018, KPMG yetwrote to the Ministry of Finance on 22 June2018 requesting payment of the samereceivables it had impaired on 31 May,”says uniBank’s management. “It is instruc-tive to add that the response to KPMG’sletter to the Finance Ministry was receivedon 12 July 2018. Nineteen days later, on1 August 2018, uniBank’s licence was with-drawn by the BoG, without the governmentand the Finance Ministry’s indebtednesshaving been paid. Even the BoG’s own in-debtedness to uniBank had not been paid.”

On the same May 31, 2018, KPMG hadalso, without consultation or discussionwith uniBank’s shareholders, impaired“other assets” of the bank amounting toGH¢3,708,861,242.98 on the basis that im-proper procedures had been employed inrecording those transactions.

UniBank shareholders were dumb-founded. “The Official Administrator didnot base his decision on any acceptableguidelines set by any professional valuer,”they say. “Considering the nature of theitems in the ‘other assets’ category, includ-ing quality landed properties and buildingsin prime locations such as Ridge and theAirport Residential areas of Accra, and thefact that impairment is about recognisingdeterioration in a given asset value, theshareholders found it difficult to accept thesituation in which prime properties whosevalues were rapidly appreciating could becompletely impaired at the same time.

“Again, to strengthen the bank’s balancesheet, the shareholders provided assetsvalued at GH¢4.4bn with a forced salevalue of about GH¢3.52bn to be liquidatedor leveraged for injecting liquidity. Unfor-tunately, that was totally ignored by theOfficial Administrator in finalising the31 May 2018 financial position of the bank.

“The Official Administrator took thisarbitrary action in spite of the fact thatSections 2.2.3 and 2.2.4 of the Bank ofGhana’s Guide for Financial Publication forBanks allow the forced sale value of suchassets to be treated as ‘assets held for sale’.The shareholders presented these assets on10 April 2018 and continued to engageKPMG on the process of perfecting theseassets to support the balance sheet. Wewere, therefore, surprised that KPMGignored these assets without recourse to theshareholders simply on the basis thatKPMG did not have sufficient time to doso.”

KPMG writes to Ministry

On June 22, 2018, almost one monthafter downgrading almost all the uniBankassets, including the government and


“The truth that ought to beknown by the Ghanaian publicis that the Bank of Ghana relied on a Draft Report dated13 July 2018 by KPMG/OA withseveral caveats to revoke uniBank’s banking licence. Atrue account of the situationexposes the deliberate steps,from the onset, by the Bank of Ghana, through its BankingSupervision Department andthe OA, to weaken uniBank, ignore credible efforts by the shareholders to revive the bank, and ultimately withdraw its licence.”


quasi-government indebtedness, KPMGwrote to Finance Minister Ofori-Atta aboutuniBank’s “government and government-related receivables”.

Signed by Simon Dornoo for the KPMGOfficial Administrator, the letter said:“We wish to bring to your attention andrequest that you use your good offices toassist uniBank Ghana Limited receive

overdue amounts from Government andGovernment-related entities.

“These receivables totaling GH¢868,973,599.10 as at May 31, 2018 … are the repay-ment sources for various facilities grantedby the bank. We will welcome the opportu-nity at your earliest convenience to discussthis matter and provide any additionalinformation and/or clarification that you

require.”The letter tabulated the individual in-

debtedness of the government and govern-ment-related entities. Crucially, the replydid not come from Ken Ofori-Atta, it camefrom Deputy Finance Minister Charles AduBoahen, who wrote back to KPMG on July12, 2018, saying: “[The] Ministry of Financeappreciates your role as Official Adminis-trator for uniBank. MoF is currently vali-dating the numbers together with [the]Bank of Ghana and as soon as practicable,would revert with full details as requested.”

A day after receiving the Ministry ofFinance’s reply, KPMG went on to declareuniBank insolvent. In a draft report datedJuly 13, 2018, titled, Financial Conditionand Future Prospects of uniBank GhanaLimited – Updated, KMPG told the BoGthat uniBank could not be rehabilitated.Following this recommendation, the BoGrevoked uniBank’s license on August 1,2018.

On the same day, the BoG turned KPMGinto a Receiver for uniBank, an actionwhich was against the law. On September4, 2018, KPMG (the ex-official administra-tor now turned receiver), having excludeduniBank’s “other assets” from the balancesheet in the May 2018 returns, issued awrit in the Commercial Division of the HighCourt, asking that the “other assets” be nowpreserved for it as a Receiver.

According to uniBank shareholders: “Thedistasteful u-turn of the Official Adminis-trator turned Receiver confirms the positionof the shareholders that the central bankset in motion a grand scheme to run uni-Bank into insolvency, using all availableunethical, crude and vile measures byeither its own staff or other assigns.

“If not, why will an Official Administra-tor with the interest of the institution underadministration at heart, refuse to recogniseassets presented by the shareholders tohelp the bank’s position, but suddenly turnaround to ask a court to ring-fence the sameassets he had downgraded for him to appro-priate to the same bank (now under re-ceivership) after the bank’s licence hadbeen revoked for reasons that would havebeen cured by the recognition of the rejectedassets?”

It is quite instructive that under KPMGadministration, uniBank’s total liabilitieshad increased to GH¢9,162,334.25 by May2018, whilst its total assets had beenreduced to GH¢2,101,512.45 from the April2018 level of GH¢8,747,835.61. This wasbecause GH¢6,646,323.16 had been im-paired against the income surplus account.

As a result, the total shareholders’ fundsdeteriorated from negative GH¢208m byApril 2018 to negative GH¢7.2bn by May


Nii Amanor Dodoo of KPMG, appointed Official Administrator and later Receiver for uniBank.


2018. In effect, the impairments had re-duced the shareholders’ funds by almostGH¢7.2bn, a situation that rendered uni-Bank technically insolvent.

Say the uniBank shareholders: “Fromthe above, it has become clear that NiiAmanor Dodoo, the Official Administratorof yesterday and now a Receiver, contra-vened Article 23 of Ghana’s 1992 Con-stitution, which imposes a duty on admin-istrative bodies and officials to act fairlyand reasonably and comply with therequirements imposed on them by law.

“Again, by unilaterally impairing thebank’s assets to the value of aboutGH¢6.7bn out of the total assets of aboutGH¢8.7bn and declaring the bank techni-cally insolvent just two months on the job,which was to take a minimum period of sixmonths, shows clearly that the Official Ad-ministrator acted recklessly, unreasonablyand in bad faith.

“We also note other unreasonable actsof the Official Administrator, which werecontrary to Articles 23 and 296 of Ghana’sConstitution, and which were designed toput uniBank out of business and wipe outthe investments of shareholders.

“In a letter dated 2 March 2018, uniBanknotified the Acting Head of the BSD thatthere were additional receivables attribut-able to the government backed by support-ing documents, amounting to GH¢955,586,421.39. No response had been provided tothis letter at the time of the appointment ofthe OA.

“We hold the view that the technical in-solvency of uniBank was caused by theOA’s unreasonable, unjustifiable, and uni-lateral impairment of the bank’s entire loanbook and ‘other assets’, including even gov-ernment and quasi-government and evenBoG exposures to uniBank, and validatedpayment certificates issued to contractorsby the Government of Ghana.

“Indeed, the OA acted unreasonably andin bad faith, and thereby went outsidethe powers it had under Act 930. This isevidenced by the OA’s rejection of the capi-tal injection proposals presented by theuniBank shareholders.”

Credible rehabilitation proposals

To save uniBank from going under, theshareholders made the following commit-ments to KPMG to inject the needed capitalinto the bank with the view to achieving awell-capitalized and solvent bank:

l In a letter dated July 12, 2018, theshareholders informed KPMG that theywere committing GH¢2.7bn and assetsworth GH¢4.4bn (totaling GH¢7.1bn) intothe bank to recapitalize it and make it

solvent. In the same letter, the sharehold-ers informed KPMG that they were engag-ing a first class international bank as astrategic partner of uniBank and that thestrategic partner would play a major role inthe future management of the bank, if theBank of Ghana approves the arrangement.

l In the same July 12 letter, the share-holders informed KPMG that, as they hadstated in an earlier letter to the KPMG onApril 10, 2018, “the Belstar Consortiumstill maintains its commitment to off-loadall its shares in ADB Bank and invest theproceeds into uniBank. This would bring inadditional funds of about GH¢700m”.

“Indeed, these were credible rehabilita-tion prospects, which were proposed to theOfficial Administrator on 12 July, 2018,”uniBank shareholders recall. “It is on the

record that this letter from the sharehold-ers was received and acknowledged on thesame day we sent it. Regrettably, the share-holders never received any response fromthe OA.

“Also, in the press release of 20 March2018 by the BoG Governor, Dr. Addison,appointing KPMG as OA, he stated thathe was acting under Sections 107 and 108of Act 930, and specifically recited theauthority of the OA under Section 108 ‘toexercise a variety of powers to rehabilitateand return the bank to regulatory compli-ance within a period of six months, at theend of which the bank will be returned toprivate ownership and management’. TheOA, however, acted contrary to the above.The OA declined to accept the crediblerehabilitation plan of the shareholders,


A branch of CBG in Accra. The government allowed the bank to start doing business when it hadnot been licensed to do so, thus breaking the banking laws of Ghana with impunity.


which would have had a positive effect onthe capital and balance sheet of uniBank.”

Remarkably, just a day after the share-holders had submitted their resuscitationplan, KPMG, without any feedback eitherin the form of discussion or a written replyto the shareholders, sent its “draft report”on uniBank to the Bank of Ghana uponwhich the BoG withdrew uniBank’s license.

According to uniBank’s shareholders, thedraft report, which had “many caveats”, didnot comply with Section 115 of Act 930,which gives the existing shareholders thefirst option to increase their capital throughthe issuance of new shares.

The shareholders say: “It is difficult tounderstand why the OA went outside thepowers it had under Act 930 and declaredthe bank technically insolvent when theshareholders had submitted a proposal toinject the required capital into the bank soas to comply with Section 115 of Act 930.”

The documents in the hands ofAfricawatch show that at the request of the

shareholders, a meeting was held on July30, 2018 at the premises of KPMG. Theshareholders expressed deep concern aboutwhat they called “the unreasonable andunlawful” downgrading of uniBank’s assetsby KPMG, especially the indebtednessof the government and government-relatedinstitutions.

The shareholders reiterated their readi-ness to inject further capital into the bankas had been previously communicated toKPMG. They also expressed frustration fornot being given the opportunity to provideany additional capital to shore up the bank.To the shareholders, no lawful basis existedfor the denial of the opportunity to injectmore capital to save the bank.

At this meeting, the shareholders pre-sented to KPMG an offer letter of US$400mfrom a first-class international bank to beinjected into uniBank in two tranches ofUS$200m each. But KPMG disregardedthis offer.

So uniBank died

On the same July 30, 2018, the Bank ofGhana met KPMG and representatives ofuniBank’s shareholders at the central bank,during which the shareholders expressedconcern about certain aspects of uniBank’sMay/June 2018 financial report, which theyconsidered to be grossly inappropriate andworrying.

BoG’s first Deputy Governor, whochaired the meeting, advised the sharehold-ers to forward their concerns in writing tothe central bank. The next day, the share-holders submitted their letter containingtheir concerns to KPMG, with copies tothe BoG’s Deputy Governors. Both KPMGand the Deputy Governors acknowledgedreceipt in the morning of August 1, 2018.

In the letter, the shareholders drewattention to the lack of justification for theimpairments of uniBank’s assets by KPMG,particularly the government-related receiv-ables.

The shareholders maintain that if theircommitments to inject further capital ofabout GH¢7.1bn had been allowed byKPMG, uniBank could have been saved,and would have prevented the disarray thatthe livelihoods of thousands of Ghanaianshave been thrown into. Also, the use ofGhanaian taxpayer resources to fundthe gap between uniBank’s assets andliabilities would not have arisen.

In the afternoon of August 1, 2018, whilethe shareholders were anxiously waiting toreceive an official response to their letter,they instead got the shock of their livesfrom the media, announcing that the Bankof Ghana had revoked uniBank’s license,

together with four other banks, and thatthe central bank had appointed Nii AmanorDodoo of KPMG as the Receiver for uni-Bank.

The Bank of Ghana’s press statementalso announced that the government hadestablished a new indigenous bank, Consol-idated Bank Ghana Limited (CBG), andthat the BoG had appointed a receiver inrespect of the assets and liabilities of thefive banks, in addition to consolidating thegood assets and liabilities of the banks inCBG with immediate effect.

On the same day, the BoG granted auniversal banking license to the CBG,which was said to be 100% owned by theGovernment of Ghana.

On the very same day, August 1, 2018,the CBG was incorporated and the goodassets and liabilities of the five banks weretransferred to it. But CBG did not receiveits certificate to commerce business untilAugust 2, 2018, which means that all thosetransactions conducted by CBG prior toAugust 2 were in clear violation of Section27 of the Companies Act, 1963 (Act 179)and are thus deemed illegal by Ghana’sbusiness laws. Which raises the burningquestion that if you are part of the govern-ment, does that mean you are then abovethe law? No individual or company canopenly break a country’s laws, so how is itthe CBG could openly do that here?

Interestingly, in supporting the BoGaction, Finance Minister Ofori-Atta issueda press statement confirming that the gov-ernment had taken note of the measuresannounced by the BoG to consolidate thefive banks, “as part of the effort by thegovernment to restore confidence and trustin our banking system”.

The Ministry of Finance also confirmedthe capitalization of the CBG as GH¢450m,and that the CBG will be supported by aGH¢5.76bn bond issuance to purchase thegood assets and liabilities of the 5 banks.

By the end of the day, it had become clearthat, contrary to the BoG’s own indicationthat uniBank would be returned to privateownership and management in six months’time, the central bank had rather sought totransfer uniBank’s “good assets and liabili-ties” to the CBG as quickly as possible.

This decision, according to the BoG, wasbased on the recommendation made byKPMG, now the receiver, to the effect thatuniBank was beyond rehabilitation, mean-ing its liabilities far exceeded its assets.

In all this, the BoG refused to makepublic that, despite the monthly auditingand downgrading of uniBank’s loan book,and the subsequent registering of overGH¢1.3bn capital deficit which forcedthe CAR to negative 24.02% at the end of



December 2017, the bank’s total assets asof April 30, 2018 still stood at GH¢8.75bnagainst total liabilities of GH¢8.96bn.

“The truth of the matter,” say uniBankshareholders, “was that, with the incomesurplus account at negative GH¢208m atthe end of April 2018, KPMG believed thatuniBank shareholders had the capacityto recapitalise the bank and restore it toregulatory compliance. However, since thiswas not going to help them to achieve theirpre-determined objective of collapsing thebank at all cost, they decided to act reck-lessly and unprofessionally at the end ofMay 2018.”

A campaign to destroy

Immediately as the government an-nounced the establishment of the CBG, themedia and the general public began todiscuss the contents of a “report” which waspurported to be the Official Administrator’sreport on the financial condition and futureprospects of uniBank. Strangely, uniBankand its shareholders had not been givena copy of this report. Consequently, onAugust 3, 2018, the shareholders wrote tothe BoG asking for a copy of the KPMGreport for their study.

The BoG waited for ten days before reply-ing on August 13, declining the sharehold-ers’ request and saying it was “unable atthis time to make available to you a copy ofthe Official Administrator’s Report on thebank”. Incredibly, no reason was offered forthis refusal.

“We found it regrettable and unaccept-able for the BoG to deny shareholdersaccess to the OA Report even as the con-tents were being widely disseminated todiscredit uniBank and instigate public con-tempt and opprobrium against the bank,especially when no opportunity had beenprovided to the shareholders to respond toany purported finding by the OA,” uniBankshareholders said.

“A very disturbing aspect of theKPMG/OA’s report was information givento the media and the general public thatuniBank’s shareholders had granted them-selves huge loans and advances. On 20August, the shareholders wrote to NiiAmanor Dodoo and KPMG requesting forsupporting schedules and all relevantdocumentation that would enable them[the shareholders] to independently verify,validate and confirm balances reported byKPMG. Unfortunately, such supportingschedules and relevant documentation areyet to be received by the shareholders.”

On August 31, an entire month afterthe contents of the AO’s Report had beendiscussed by the media to discredit the

uniBank shareholders, the BoG finally sentan official copy to the shareholders, inform-ing them that “the Official Administratorhas now finalised the report and investiga-tions have commenced. We can thereforenow make a copy of the report available toyou”.

The implication of this is that the reportused to revoke uniBank’s license on August1, 2018 was only a draft report. This is

proved by the cover letter dated July 13,2018, that the Official Administrator at-tached to the Report. It clearly stated: “ThisReport has been prepared primarily frominformation and data extracted and verifiedto the extent possible from the financialrecords and other relevant informationmaintained by the bank, pursuant to thescope of work agreed in our engagementletter dated 20 March 2018.

“The Report has also been prepared fromthe Bank’s documents reviewed by us aswell as information obtained from inter-views conducted with relevant stakehold-ers.

“Our work was limited to the require-ments of the Banks and Specialised De-posit-Taking Institutions Act, 2016 (Act930) Section 114(5) and we have not carriedout procedures that would constitute anaudit in accordance with InternationalStandards on Auditing.

“As stated in our engagement letter,unless otherwise stated in our Report,we have not sought to verify informationcontained herein or performed proceduresnecessary to enable us to express an auditopinion on any of the financial or non-finan-cial information contained in this Report.Accordingly, we cannot and do not expressan audit (or similar) opinion on the infor-mation contained in this Report.

“We have not obtained formal confirma-tions from employees of the Bank that they

have made available to us all significantinformation relevant to our Report whichthey have knowledge of. Accordingly, weare unable to determine the extent to whichinformation and explanations providedto us are complete and accurate and theReport should be read in that context.

“Please note that our work does notinclude a full assessment of matters of legalinterpretation and regulatory compliance.We, therefore, recommend that you referthese matters to your legal advisors formore detailed evaluation and advice, ifneeded. [Signed by Nii Amanor Dodoo, forKPMG Official Administrator].”

Lies told to IMF

Two years after their bank was unjusti-fiably liquidated, the uniBank shareholdersare still quite upset by what they call “thedeliberate misinformation that has been fedto the IMF on the circumstances that led tothe collapse of the bank” by the Ministry ofFinance and the BoG. “This has obviouslydenied the Ghanaian public, the interna-tional community and respected institu-tions such as the International MonetaryFund (IMF), and the World Bank Group ofunbiased but valuable information to arriveat informed conclusions on the centralbank’s action,” say the shareholders.

According to them, the misinformationhas led to the IMF making statementsabout uniBank that contain “grave inaccu-racies”. Specifically, they point to thefollowing IMF statement included in itsMarch 7, 2019, report on Ghana: “...Onsiteinspections conducted by the BoG in late2017 and early 2018 highlighted furtherunder-provisioning in some institutions –among others resulting in the appointmentof an official administrator at uniBank (oneof Ghana’s largest banks). By early July, ithad become clear that prudential reportsfor uniBank were largely inaccurate andthat the bank had, in fact, become deeplyinsolvent. Given the absence of crediblerehabilitation prospects, the BoG decided toresolve the bank in August 2018...”

The shareholders say the above state-ment did not give an accurate account ofhow the central bank conducted its super-visory functions in respect of uniBankbetween July 2017 and August 1, 2018,when the bank’s license was revoked.

“Sadly, yet expectedly, the BoG’s biasedview on uniBank became the narrativein the public space and that view subse-quently formed the basis of statementsand conclusions by reputable persons andinstitutions on the bank,” the shareholdersexplain.

“As much as the shareholders share the


July 2017 was only seven months after President Akufo-Addo’s government took office. Thirteen monthslater, uniBank was dead andburied. This terrible tale shows what the poisonous effects of dirty politics can do if it is allowed to become the dominant factor that determines the survival or extinction of banks in the country.


view that the implementation of theroadmap met some challenges, they aredeeply worried about how the BoG unfairlymisrepresented uniBank to the IMF, whichultimately formed the basis of the unsub-stantiated comments by the Fund.

“The shareholders hold the position, andstrongly so, that the steps taken by theBoG during the roadmap implementationexercise were meant to run the bank intoinsolvency to help achieve an agenda to col-lapse it. For the avoidance of doubt, theshareholders state again that their bank, asat 31 July 2017, had CAR of 10.7%, totalpaid up capital of GH¢422.10m, and totalequity of GH¢500m. This was the positionafter the AQR update was completed andshareholders injected the required capital.UniBank was therefore SOLVENT as at 31July 2017,” a point the shareholders wantto make very clear.

Conclusion

July 2017 was only seven months afterPresident Akufo-Addo’s government tookoffice. Thirteen months later, uniBank wasdead and buried. This terrible tale showswhat the poisonous effects of dirty politicscan do if it is allowed to become the domi-nant factor that determines the survival orextinction of banks in the country.

This is poignantly illustrated in howlittle the government needed to capitalizethe Consolidated Bank of Ghana (CBG): Amere GH¢450m, according to the BOG. Yetthe government, quasi-government entities,the Ministry of Finance and the Bank ofGhana itself owed uniBank nearly GH¢1billion, which, had it been paid by thegovernment and its other entities under thenormal course of lawful governance, wouldsurely have allowed uniBank to survive. In

fact, uniBank would then have had twice asmuch capital as CBG on the day that thenew bank was incorporated.

But Finance Minister Ofori-Atta let dirtypolitics rule his thinking, and no matterwhat entreaties the uniBank shareholdersand management made to him to pay upthe government’s indebtedness to the bank,he did not do it and thus allowed uniBankto go under.

The multimillion-dollar question beggingfor an answer is: Why would the govern-ment not pay off its indebtedness to uni-Bank when it was that same government,acting now through the Ministry of Financeand the Bank of Ghana, that used thealleged insolvency of uniBank to collapsethe bank? Of course there is no answer thatwill be acceptable or honest, just as sure asthe fact that any nation run in this way willnot have a prosperous future. n


Finance Minister Ken Ofori-Atta (right) and Information Minister Kojo Oppong Nkrumah at a press conference in Accra. Ofori Atta has much to answer for regarding uniBank’s collapse.



On 20 March 2018, the Bank ofGhana (BoG) put uniBank under officialadministration. The BoG gave the followingspurious reasons for their decision, and asshareholders we are obliged to respond asfollows:

BoG’s Reason 1That uniBank Ghana Limited has been

faced with severe insolvency and liquiditychallenges over the past two years, with per-sistent clearing deficits resulting in exten-sive reliance on the Bank of Ghana’sEmergency Liquidity Assistance (ELA) in-strument since 2015. As a result, BoG isheavily exposed to uniBank to the tune ofGH¢2.2 billion, of which GH¢1.6 billion isunsecured.Response:

The BoG’s statement above does not givethe exact solvency and liquidity position ofuniBank at the time the Official Adminis-trator arrived on 20 March 2018.

As of 20 March 2017, the BoG wasexposed to uniBank to the tune of GH¢2.2billion of which GH¢1.6 billion was unse-cured. However, the following liquid assetsin favor of uniBank were enough to coverthe unsecured exposure of GH¢1.6 billion:

l On 14 February 2018, the BoG in-formed uniBank that ‘the Ministry ofFinance (MoF) on 7 February 2018 agreedto use their outstanding indebtedness to

you in respect of IPCs amounting toGH¢428,817,961.06 to offset part of theunsecured portion of your obligation to theBank of Ghana’. This was not mentioned inthe BoG’s press release withdrawing uni-Bank’s licence on 31 August 2018.

l Again, on 2 March 2018, uniBank, ina letter to the BoG’s Banking SupervisionDepartment (BSD), advised that the ‘entireGovernment IPCs amounting to GH¢955,586,421.39 should be applied to set off partof the unsecured portion of the EmergencyLiquidity Support (ELP)’. This was also notmentioned by the BoG Governor whenwithdrawing uniBank’s licence.

l In the same letter dated 2 March 2018,uniBank also advised that ‘in addition,[apply] our assigned securities of GH¢618,235,718.00 and foreign exchange balance ofGH¢105,503,659.88 towards the settlementof our liquidity support. This will resultin an outstanding liquidity support ofGH¢385,187,200.73’. This was also notmentioned in the BoG press release with-drawing uniBank’s licence.

l On 29 November 2017, Belstar Consor-tium conveyed their decision to the Bank ofGhana to be allowed to sell off their entireshares in the Agricultural DevelopmentBank (ADB) worth over GH¢700 million toinject this amount into uniBank. As at20 March 2018, this application was stillwaiting for the BoG’s approval.

It is clear that the Bank of Ghana’sapproval for GH¢700 million to be injectedinto uniBank could have cleared all theunsecured BoG’s exposure to uniBank andthe bank would have registered a positivebalance of GH¢315 million in the books ofthe central bank.

BoG’s Reason 2That uniBank also faces a significant

capital shortfall. On 20 March 2017, BoGdirected uniBank, per a letter, to submit acapital plan and resolve its significant un-dercapitalisation within 180 days from thedate of the letter in accordance with Section106(1) of the Banks and SDIs Act, 2016(Act 930). Since then, uniBank’s CapitalAdequacy Ratio (CAR) has rather deterio-rated into negative from September 2017,and in a much more distressed conditionwith CAR of negative 24.02% and capitaldeficit of GH¢1.18 billion as at December2017.Response:

After the Assets Quality Review (AQR)update results were known, uniBank’sshareholders injected the required capital,thus by 31 July 2017 uniBank had the high-est minimum paid-up capital in the wholebanking industry of Ghana. It stood atGH¢370.13 million. On the same 31 July2017, uniBank also had Capital AdequacyRatio (CAR) of 10.70%, total paid-up capital

UniBank shareholders:

We did nothing wrongThe closer one looks at the events that led to the revocation of uniBank’s

license, the more one sees the fingerprints of the Bank of Ghana as it strove

mightily to bring uniBank crashing down by any means necessary. Here, uniBank

shareholders give a blow-by-blow analysis of the reasons that the

Bank of Ghana used in collapsing their bank.

“


of GH¢422.10 million, and total equity ofGH¢500 million. All these were activatedwithin 180 days of BoG’s 20 March 2017letter, and in accordance with Section106(1) of Act 930.

Between 15 August and 31 December2017 however, the BSD conducted unprece-dented and unplanned on-site inspectionsoutside the normal annual on-site examina-tion which had already been conductedbetween 15 May and 21 June 2017. Duringthe unplanned and inexplicable on-siteinspections, the BSD made huge provisionson uniBank’s loan book.

In addition to the normal annual on-siteinspection, which all banks go through oncea year, uniBank underwent four inspec-tions (three additional surprise and un-planned inspections between 15 Augustand 31 December 2017). It appeared thatuniBank had been singled out for thisspecial treatment. In fact, these monthlyprovisioning of the bank’s credit facilities,including government, quasi-government,and even Bank of Ghana exposures was thedriving force behind the deteriorationof uniBank’s CAR into negatives fromSeptember 2017.

Notwithstanding these strained condi-tions under which uniBank operated,the CAR improved remarkably betweenNovember and December 2017 when itregistered positive 5.20% as shareholdersinjected additional capital of GH¢60 millionbefore the end of 2017. Unfortunately, theBSD did not appear to feel comfortable withthis performance and was determined tofind a reason to return the CAR into nega-tive. This was our thinking because in theBSD’s letter to uniBank on 28 February2018, BoG indicated that even though thebank’s CAR had improved to positive 5.2%,the BSD had noted that between Septemberand December 2017, uniBank’s gross loansincreased by GH¢760.67 million.

Unibank’s management explained thatthe GH¢760.67 million was not a growthin the credit portfolio but was due to a soft-ware problem which had been alreadyresolved. The BSD did not agree with themanagement’s explanation and they there-fore impaired the whopping figure ofGH¢760.67 million instantly without noti-fying the uniBank Board of Directors or theshareholders.

This arbitrary impairment sent uniBank,in the words of the BoG Governor, “into amuch more distressed condition with CARof negative 24.02% and a capital deficitof GH¢1.18 billion as a December 2017”.Unibank’s shareholders expressed veryserious concerns about what appeared to bea predetermined action by the BoG to bringthe bank down.

It is recalled that in the BoG’s 28 Febru-ary 2018 letter, the BSD had indicated thatthere had been a remarkable performancebetween November and December 2017when uniBank’s shareholders injected anadditional GH¢60 million into the bank,sending the CAR upwards to 5.20% despiteheavy loan provisions made betweenAugust and December 2017. Our view isthat the BSD did not feel comfortable withthis position, hence the arbitrary impair-ment of the GH¢760.67 million whichraised the capital deficit from negativeGH¢400 million to negative GH¢1.18billion.

The shareholders submit here withoutany doubt that the BSD, realising that

there had been remarkable performancebetween November and December 2017, asthey themselves confirmed, and realisingagain that the shareholders were capable ofmanaging the capital deficit of aboutGH¢400 million, decided to impair theGH¢760.67 million in order to make itdifficult for the shareholders to restore thebank to regulatory compliance and requiredcapital liquidity levels. We find the BoG’sdiscretion in this matter very regrettable.

The BoG’s impairment of theGH¢760,675,826.23 on the basis of theclaim that this was from the grantingof new loans between September andDecember 2017, and this misinformationconveyed to the media by the Governor,were unreasonable acts by the central bankcontrary to Articles 23 and 296 of the Con-stitution of the Republic of Ghana. Theseacts, we believe, were designed to putuniBank out of business and wipe out theinvestments made by its shareholders.

BoG’s Reason 3That, this notwithstanding, the bank has

continued to increase its asset base (grant-ing new loans to clients) to GH¢6.1 billionin December 2017 from GH¢4.9 billionin September – amidst increasingly poorloan asset quality. The bank’s gross loansincreased by GH¢760.67 million within thesame period. As a result, its non-performingloans (NPLs) have remained high, furthereroding the capital base of the bank andpresenting liquidity challenges.Response:

In the BSD’s letter dated 28 February2018, it indicated that they had noted ‘anincrease of GH¢760,675,826.23 in grossloans from the September 2017 positionof GH¢3,337,574,219.77 to GH¢4,098,250,046.00 recorded in December 2017 in spiteof the directive from the Bank of Ghanato uniBank to cease granting new loans andadvances both funded and non-fundedexcept fully-cash-secured credit facilities(refer to our letter dated 17 March 2016 ref-erenced BSD/104/2016)’.

It was this purported increase ofGH¢760.67 million in the loan book be-tween September and December 2017which the BSD instantly impaired andpushed the bank’s CAR from positive 5.20%to negative 24.02%. The BSD’s letter clearlystated that the gross loans stood atGH¢3,337,574,219.77 as at September 2017and GH¢4,098,250,046.00 at December2017.

However, when the Governor was an-nouncing the appointment of the OfficialAdministrator on 20 March 2018, he statedthat uniBank’s assets base (granting newloans to clients) increased from GH¢4.9


Dr. Kwabena Duffuor has received supportfrom his fellow shareholders who insist that they did nothing wrong in the collapseof uniBank.


billion in September 2017 to GH¢6.1 billionin December 2017. The Governor’s state-ment contradicted the BSD letter sentto uniBank on 28 February 2018 whichstated that the gross loans jumped fromGH¢3,337,574,219.77 in September 2017 toGH¢4,098,250,046.00 in December 2017.Considering the fact that the two state-ments were issued within a month’s inter-val, we believe that such contradictioncould have been avoided if care had beenexercised. UniBank’s loan book could nothave been GH¢6.1 billion in December2017. If the loan book alone was GH¢6.1billion, then what was the size of thebalance sheet at the end of 2017?

BoG’s Reason 4 That, the reserve ratio (a measure of

liquidity) has remained consistently below1% since October 2017 compared to theregulatory minimum of 10%, resulting in aconstant liquidity shortfall, and continuedreliance on the BoG’s Emergency LiquidityAssistance facility.Response:

It is difficult for the shareholders to agreeto the above statement. This is because,as of 31 July 2017, uniBank had a CapitalAdequacy Ratio (CAR) of 10.70%, totalpaid-up capital of GH¢422.10 million, andtotal equity of GH¢500 million. Therefore,it was the unusual and unplanned monthlyauditing and downgrading by the BoG’sBanking Supervision Department (BSD)that brought the CAR to this level.

We recall that the arbitrary, inexplicable,unplanned and well beyond the normalannual on-site inspections were vehementlyrejected by uniBank’s Board of Directors intheir letter to the BSD dated 18 January2018. The Board of Directors copied theletter to the Governors of the Bank ofGhana. On 30 January 2018, the head ofthe BSD responded to uniBank’s Board ofDirectors, explaining that the BSD tookthose steps because “after the completionof the AQR exercise in March 2017, it wasdetermined that uniBank was significantlyundercapitalized with Capital AdequacyRatio (CAR) of 4.71%”.

Indeed, this statement has exposed theregulator. It suggests that the roadmapimplementation towards the restorationof uniBank to the regulatory and capitalliquid levels was based on wrong informa-tion. In sum, the whole capital restorationprogram implemented by the BoG inrespect to uniBank was based on the wrongpremise.

Was the BSD not aware that: l That as of 31 July 2017, uniBank’s

CAR was 10.70%? l That uniBank had a minimum paid-up

capital of GH¢370.13 million and it was thehighest minimum paid-up capital in thewhole banking industry of Ghana?

(c) What was really the motive of theregulator in the statement that uniBank’sCapital Adequacy Ratio (CAR) in March2017 was 4.71%, when it was a well-knownfact that the CAR had improved throughthe injection of capital by the shareholdersand that this had been recorded in thebooks of the central bank?

l Had the central bank not recorded inits 23 November 2017 Monetary PolicyCommittee (MPC) document that ‘threebanks – UBG, GCB and ZBG – will be ableto raise the required minimum unimpairedpaid-up capital of GH¢400 million byDecember 2018 once their respective in-come surplus accounts are capitalised’?

The shareholders would like to empha-size at this stage that uniBank was not aloss-making institution until the BSDbegan their inexplicable on-site monthlyauditing and downgrading of the samecredit facilities, including government andquasi-government exposures. This unusualbehavior of the regulator, including down-grading their own BoG exposures, sent thewrong signals to the market and beganto undermine public confidence, thus mak-ing uniBank struggle to function underextremely difficult conditions starting on 15August 2017.

Those conditions were worsened whenthe government was unable to pay thealready validated Interim Payment Certifi-cates (IPCs), worth over GH¢800 million, toimprove uniBank’s liquidity. It is notedthat on 22 June 2018, three months afterthe Official Administrator (OA) had takenover the management of uniBank, he re-quested the Ministry of Finance to pay thereceivables totaling GH¢868,973,599.16 asat 31 May 2018. The OA received a non-committal response from the Ministry on 12July 2018. By the time the BoG withdrewuniBank’s licence on 31 August 2018, theMinistry of Finance still had not paid thereceivables requested by the OA.

It was under such difficult conditionsthat uniBank sought liquidity support fromthe BoG at an interest rate of 26% perannum against uniBank’s own security atthe BoG in the form of Treasury Bills whichattracted an interest rate of 14% perannum. Thus, even though the BoG’s Emer-gency Liquidity Assistance (ELA) providedliquidity to uniBank, it was very expensiveand therefore did not impact positively onthe bank’s profitability and solvency.

BoG’s Reason 5That, in line with these developments,

BoG’s Banking Supervision Department

has reached the conclusion that uniBank iscurrently insolvent under Section 123 (4) ofthe Banks and SDI Act, 2016 (Act 930), andin breach of all its key prudential regulatoryrequirements. Despite persistent pleas forextension over the past year, the sharehold-ers have failed to restore the bank to regula-tory capital and liquidity levels. The bank’scurrent situation reflects its poor corporategovernance and risk management practicesthat rendered the bank vulnerable to macro-economic shocks.Response:

The above conclusion reached by theBoG’s Banking Supervision Departmentwas very unfair and unfortunate. It wouldhave been helpful if the BSD had explainedcarefully and systematically how withinjust four months:

l UniBank’s total paid-up capital ofGH¢422.10 million as at 31 July 2017 couldbe wiped out completely by December 2017.

l The BSD could make a provisionof GH¢1338.9 million outside the normalannual on-site inspection?

l If the BSD found the provisions madeduring the annual on-site inspection inade-quate, why did they not convey this to theuniBank Board of Directors to explain whythe BoG felt the need to make three moreon-site inspections in the space of threemonths?

l Was it correct when the BSD indicatedin its conclusion that ‘despite persistentpleas for extension over the past years, theshareholders had failed to restore the bankto regulatory capital and liquidity levels’?What was the motive behind this statementwhen the BoG’s own document of 23November 2017 had clearly stated thatuniBank had the highest minimum paid-upcapital of GH¢370.13 million in the wholeGhanaian banking industry?

l Moreover, at the time the BSD wasmaking those huge provisions of theuniBank loan book between August andDecember 2017, did the shareholders notinject additional capital of GH¢60 millioninto the bank? This is clearly documentedin the BoG’s MPC document of 23 Novem-ber 2017.

We therefore reject outright the conclu-sion reached by the BSD because the MPCdocument confirms that:

(a) UniBank was not one of the ‘threebanks whose liquid assets or volatile fundswere less than the prudential limit of 10%at the end of October 2017’.

(b) UniBank was among the ‘four bankswhose capital levels were increasedbetween July and October 2017’. In fact,uniBank had the highest capital injectionof GH¢60 million within this period.

64 June/July 2020 l africawatch ”



We were informed in early 2016that uniBank was experiencing persistentliquidity crisis and hence was borrowingheavily daily on the interbank market. [Inits] first application for liquidity support in2016, uniBank informed us that they wereexperiencing large withdrawals from keyinstitutions such as COCOBOD, VRA,

EDC, DATABANK, etc. According to theletter, COCOBOD was withdrawing overGH¢400 million while it also had to finance[an] outstanding VRA facility of aboutUS$100 million, etc.

On the other hand, we had informationthat uniBank had a number of governmentand government-related receivables total-

ing over GH¢1.3 billion, on account of itslarge exposure to the energy and construc-tion sectors. In particular, we had informa-tion that they were exposed to the Ministryof Finance, Road Fund, GETFUND, COCO-BOD, BDCs, other government contractors,etc.

Indeed, [an] Assets Quality Review had

Former Second Deputy Governor Dr. Asiama:

UniBank could have been saved

To understand the depth of therough treatment meted out touniBank by the Bank of Ghana,one has to turn to Dr. JohnsonAsiama, Second Deputy Governorof the Bank of Ghana at the time.

On January 16, 2019, Dr. Asiama, recentlyresigned, told a stunned nation that contrary toinsinuations broadcast by radio and TV – insin-uations driven by the ruling New PatrioticParty – that his resignation was in connectionwith a ponzi-like gold racket run by Menzgoldthat had bilked the savings of thousands ofGhanaian depositors, his resignation was infact demanded by President Nana Akufo-Addo,via Finance Minister Ken Ofori-Atta.

“I was called and asked to resign from officeby the Finance Minister, Hon. Ken Ofori-Atta.And the reason he gave me that day was thatthe president wanted to appoint his own personin my place. It never had anything to do withMenzgold whatsoever. The rest is history”,Dr. Asiama explained at the time.

An economist with an extensive career experience at the Bankof Ghana over 20 years, Dr. Asiama was appointed Second DeputyGovernor in April 2016 to replace Dr. Abdul-Nashiru Issahakuwho had been promoted to the position of Governor of the centralbank. Until his new appointment, Dr. Asiamah was the Assistant

Director of the Bank’s Economics Department,where he coordinated the work of the MonetaryPolicy Committee.

Dr. Asiama holds a Ph.D. in Economics fromthe University of Southampton, UK, and anM.Phil. in Economics from the University ofGhana. He joined the Bank of Ghana in 1996and rose swiftly through the ranks, serving invarious departments such as Banking Supervi-sion, Research, and Financial Markets.

Between 2010 and 2013 he went regional,serving as Director of the MacroeconomicManagement Department of the West AfricanInstitute for Financial and Economic Manage-ment in Lagos, Nigeria, where he designed andmanaged the capacity building programs for thestaff of central banks, ministries of finance, andother public sector institutions across the WestAfrican sub-region.

Dr. Asiama’s resignation from the Bank ofGhana came just 9 months after his formerboss, Dr. Issahaku, was forced to resign asGovernor by President Akufo-Addo’s govern-

ment purely on political grounds.In a recent statement, Dr. Asiama went into some detail about

the treatment that the Bank of Ghana and Ministry of Financegave to uniBank prior to the bank losing its license in August 2018.He made the following clarifications about uniBank:

Dr. Johnson Asiama, the former Second Deputy Governor of the Bank of

Ghana, provides an insider’s view to how the Bank of Ghana treated uniBank and

describes just how terrible the repercussions of revoking their license have been.

Dr. Johnson Asiama, the man Akufo-Addo asked for his resignationbecause the president wanted his ownperson in Asiama’s place.

“


also revealed that uniBank was among 4banks that had significant exposures toState Owned Enterprises (SOEs) and BulkOil Distribution Companies (BDCs) in theenergy sector. UniBank and these otherbanks were thus borrowing heavily dailyfrom other commercial banks and neededBoG’s liquidity support (ELA) to keep themin operation.

UniBank in particular had financed a lotof government projects since 2015, espe-cially in the energy and constructionsectors. Total liquidity support from theBank of Ghana for example, increasedsteadily from GH¢200 million at the end of2015 to over GH¢2.2 billion by the end of2017. We were optimistic because the ESLA[Energy Sector Levy Act] payments tobanks had then started, and hence surethat the situation would improve by end-2016.

At the time, uniBank’s total exposure tothese two sectors was reported to be morethan GH¢1.3 billion, and hence, the delayin payment was having a severe impact onthe bank.

Specifically, somewhere around June2016, we noticed that uniBank’s primaryreserves ratio had suddenly declinedsharply compared to the required pruden-tial limit of 9%. The situation continuedfor a couple of weeks, and we instructedthe head of BSD [Banking SupervisionDepartment] to monitor the liquidity posi-tion. Unfortunately, BSD only attributed itto heavy interbank withdrawals.

However, the Assets Quality Review(AQR) exercise did not suggest that uni-Bank was irredeemably insolvent, andhence we deemed it a typical liquidityproblem. I actually tasked the head of BSDat a point to check whether the earlierliquidity support was not being mis-applied, but nothing was reported. BSDonly attributed it to early redemptions andheavy interbank withdrawals.

UniBank subsequently came to discuss arequest for additional ELA to meet thesurge in withdrawals. However, they hadELA which was yet to mature. Naturally,the existing ELA had to be paid-off firstbefore any additional ELA could be consid-ered. The other difficulty was that uniBankdid not have adequate Treasury bills ascollateral to back a new request, and grant-ing unsecured ELA was being discontinued.On the other hand, we were concerned thatthe liquidity difficulties could result indaily clearing failures that would havesystemic implications for the entire bank-ing industry.

We therefore invited uniBank and askedthem to explore the interbank money mar-ket more aggressively for liquidity, since a

number of banks had secured liquidity sup-port (due to the energy related difficultiesthat confronted the entire banking industryat the time) and if their liquidity situationimproved may be able to lend to them. Uni-Bank subsequently came back that UMB[Universal Merchant Bank] was willing.Fortunately, UMB had adequate Treasurybill investments to use as collateral andhence a request for support could be consid-ered.

Exploring options as possible collateralfor the borrowing on the part of uniBank,we knew they were to receive aboutGH¢330 million in ESLA and also govern-ment receivables in excess of aroundGH¢900 million at the time. Given thatthese payments would always be made

through their settlement accounts withBoG, we were comfortable that we hadsomething to hold on to as collateral.Indeed, this was consistent with the Assess-ment Criteria for Liquidity Support, whichwas approved by the Bank of Ghana Board.

This was why under the circumstances(and faced with the potential danger a non-action would entail), we decided to facilitatethe interbank trading by supporting UMBso that they lend interbank to uniBank. Ifwe did not do so, uniBank could havestarted failing daily clearing and we wouldstill have to give them overnight liquiditysupport (uncollateralised) which wouldhave systemic consequences anyway. Thiscould pose a financial stability risk for theentire industry given that uniBank was



regarded as systemically important. At the same time, the DKM [Diamond

Micro Finance Ltd.] crisis had also reacheda stage where BoG had to intervene. TheBank of Ghana Board approved to pay theliquidation costs earlier so that the liquida-tor, Registrar General’s Department, couldaddress the issues. However, by August2016, the DKM issue had become a nationalsecurity problem as some depositors werereportedly committing suicide in BrongAhafo, etc. It is estimated that nearly 50individuals committed suicide in the Brong

Ahafo region alone before our intervention.Our regional staff in Sunyani were also

sending constant SOS messages to us thattheir lives were in danger. Customers ofDKM were threatening to attack them, tothe extent that they had to take off theiruniforms outside the Bank premises inSunyani. Meanwhile, the flagbearer of theminority party had also just declared inSunyani that he would refund all depositsto DKM customers if elected.

The Bank of Ghana Board was briefedand they gave us the go ahead to assist theliquidator, who had estimated that if aboutGH¢150 million could be advanced initially,they would be able to pay off all those whohad deposits less than GH¢10,000. Theseconstituted about 90 percent of all DKMcustomers and hence the agitation couldbe contained entirely. Indeed, these arethe payments alluded to by the FinanceMinister in the budget statement.

A Memorandum of Understanding wasestablished between BoG and Ministry ofFinance (signed by the Minister of Finance,Hon. Seth Terkper and the Governor, Dr.Abdul-Nashiru Issahaku) in line with Sec-tion 6(1-3) of the Bank of Ghana Act 2002,Act 612. In line with the MOU, outstandingadvances made to the Registrar General forpayments to DKM customers could betreated as government indebtedness andtreated as provided in the above section.

UMB was chosen to work with GCB(given its wide branch network) as the pay-ing bank. This was how come paymentsto DKM customers were started aroundNovember 2016 and which has helped tocalm the situation up to now.

The Term Sheet was therefore negotiatedbetween BoG technical staff and UMB, cov-ering both the transaction for uniBank andalso that for the Registrar General (theOfficial Liquidator for DKM). The emailcorrespondence is available for perusal. Itwas nothing I took personal interest in.

The term sheet was signed around end-September 2016 and the uniBank facilitywas to mature by end-December 2016.

We were comfortable with this arrange-ment because uniBank did not show anysign of insolvency at the time. Since BoGhad also taken over all their Treasury billholdings to collateralise earlier borrowingfrom the Treasury Department, uniBankcould also not access the interbank moneymarket. [Because of] the signs of liquiditystress, [uniBank] had begun an aggressivedeposit mobilisation exercise by openingabout 15 branches at the same time.

Besides, they started [a] road-show for a10-year Medium Term Note (MTN) whichwe had approved. EDC (the investmentwing of Ecobank) was underwriting this

deal which was expected to yield aboutGH¢650 million. UniBank told us theywanted to use the proceeds to pay off theirshort-term liabilities (especially the BoGELA) because of the high interest rates.

On the GH¢150 million for the RegistrarGeneral, interest rate was agreed at 20%but was deferred with a tenor of 12 months.UMB had a service fee of 2.5% on amountsdisbursed. Incidentally, thanks to the rela-tively high interest income from ELA in2016, the Bank of Ghana was able to absorball the amounts disbursed to DKM cus-tomers in its 2016 accounts. This meansthat any remaining undisbursed amountswith UMB would have to be paid directly tothe government when the liquidationprocess ends.

Our attention was drawn around end-January 2017 that uniBank had paid backGH¢150 million out of the GH¢300 milliongranted them, but continued to servicethe facility. This was not strange becauseit was usual for banks to ask for someroll-overs upon maturity. We thereforesummoned them to discuss the issue, andthey explained that the MTN road-showhad to be truncated due to election relateduncertainties, but were hopeful to pay offthe remaining GH¢150 million by end-Jan-uary. They were expecting that governmentrelated exposures would be paid to themearly enough to help lessen the liquiditypressures.

Unfortunately, by end-February 2017, wewere informed again that uniBank had notpaid back the GH¢150 million remainingalthough they continued to service intereston the facility.

Upon assumption of office by the newGovernor, [Dr. Ernest Addison] and withthis development in mind, I prompted himon the need to get the Minister of Finance[Ken Ofori-Atta] to pay uniBank at leastsome part of their claims on the govern-ment.

The Minister of Finance was actuallyinvited to the Bank, based on my prompt-ings to discuss these payments to uniBank,but he declined suggestions, on the groundsthat uniBank had gotten enough supportto thrive. Clearly, if at least part of thesepayments were done at the time, uniBankcould have avoided the persistent dailyclearing failures that eventually shut themout of the interbank money market.

To conclude, the liquidity supportgranted to uniBank was meant to helpaddress the persistent liquidity problems aswe believed at the time. We only acted toprevent a possible larger crisis that wouldhave impacted negatively on the entirebanking industry.


Bank of Ghana, which allowed itself to beused to kill one of Ghana’s leading indigenousbanks, uniBank.

”



In January 2019, the Office of theAttorney General and Ministry ofJustice of Ghana informed the gov-ernment of President Nana Akufo-Addo in clear terms that thegovernment itself and certain of its

officials have broken the law in the courseof revoking the license of one of the mostpromising indigenous banks in the country,uniBank.

The license of uniBank was revoked onAugust 1, 2018 by the Bank of Ghana (thenation’s central bank) under the watchfuleyes of Finance Minister Ken Ofori-Atta.The government claimed that the bank wasinsolvent and could not be saved. However,the laws applicable to such revocationswere blatantly flouted by the Ministry ofFinance and the Bank of Ghana (BoG),acting on behalf of the government.

The cavalier manner in which the twogovernment entities and their officialsacted in the uniBank matter apparentlysurprised the Attorney-General’s Officewhen Dr. Kwabena Duffuor II, the CEO ofuniBank and son of the bank’s majority

shareholder, Dr. Kwabena Duffuor, andtwo other defendants in a case brought bythe defunct bank’s receiver, Nii AmanorDodoo, sent a notice to the Attorney-Gen-eral (AG) of their intention to join the AGto the case. Unibank officials had earliersued the government and the receiver forillegally revoking the bank’s license.

After the AG’s Office examined the docu-ments on the case, the Deputy Attorney-General and Deputy Minister of Justice,Godfred Yeboah Dame, acting on behalf ofthe Office of the Attorney-General, wrote adamning 11-page letter to Ofori-Atta onJanuary 25, 2019, which got leaked, tellinghim: “We note that CBG [the ConsolidatedBank Ghana] was incorporated on 1 August2018, and a certificate to commence busi-ness was issued to that bank on 2 August2018. We also observe that selected assetsand liabilities of 5 banks were transferredto CBG on 1 August 2018 via a Purchaseand Assumption transaction, before thegrant of a certificate to commence business.

“Section 27 of the Companies Act, 1963(Act 179) prohibits a company incorporated

in Ghana from transacting a business untilit has satisfied the provisions therein, andhas been issued with a certificate to com-mence business. A violation of this provi-sion constitutes a criminal offence for whichthe company and every officer of the com-pany shall suffer a penalty prescribedby Section 29 of Act 179. The transfer ofselected assets and liabilities of uniBankon 1 August 2018 is business, which CBGwas not authorised by law to engage in asat 1 August 2018.”

The Attorney-General’s Office tore intoshreds many of the actions taken bythe Ministry of Finance, Bank of Ghana,and KPMG (the Official Administrator/Receiver) against uniBank, and told them:“We have presented these preliminaryobservations in order for the government tohave a proper appreciation of the circum-stances of the suit to which the defendantsseek to join the Attorney-General, and toenable us determine within the frameworkof the report prepared by KPMG pursuantto Section 114 of Act 930, the measures andoptions that may be competently explored.”

Attorney-General’s Office admits:

Gov’t broke the law on uniBankWhen something is not right, it is the righteous duty of men and women of

goodwill to call it out as it is. This is what the Attorney-General’s Office in Ghana did

when it bluntly told President Akufo-Addo’s government in a leaked letter dated January 25, 2019,

that the “revocation of the licence of uniBank was not based on Section 16 of Act 930” of the banking

regulations, and therefore the government’s action could not be supported by law. Fifteen months

later, the same Attorney-General’s Office has made a dramatic U-turn and taken Dr. Kwabena

Duffuor and 8 others to court over the uniBank collapse. What changed between the original

outspokenness of the Attorney-General’s Office regarding uniBank and the current

court case? Whose law is the Attorney-General’s Office now carrying out?


The Attorney-General’s Office continued:“… Based on the clear language of Section122(2), any revocation of licence pursuantto a recommendation of the official admin-istrator under Section 122 may be done inaccordance with Section 16 of Act 930. Itis undeniable that [the] revocation of thelicence of uniBank was not based on Section16 of Act 930, because this would haverequired compliance with the provisions ofthat Section which further stipulates theprovision of notice in writing to the bank,specification of the proposed action andthe grant of at least 30 days opportunityto the bank to make written representation.It therefore cannot be asserted that thetermination of official administration waseffected in accordance with Section 122 ofAct 930.

“It is also not the case that uniBank hasbeen liquidated in accordance with Sections123 to 139 of Act 930. Liquidation underSections 123 to 139 is a process involvingrecourse to the mandatory procedures pre-scribed to be undertaken by a receiver dulyappointed in accordance with Section 123.

It is incontestable that the receiver didnot pursue the gamut of mandatorily-prescribed actions in Sections 123 to 139before the assumption of the selected assetsand liabilities of uniBank by CBG.”

Court case

Strangely, or maybe not very strangely,despite the damning letter by the Attorney-General’s Office clearly telling Ofori-Attalast year that the government was verywrong in breaking the law of the nation inregard to uniBank, the government has stilltaken Dr. Kwabena Duffuor and 8 others tocourt, and charged them with multiplecounts, including contributing to the col-lapse of uniBank.

One of Dr. Duffuor’s 8 co-defendants,Dr. Johnson Asiama, the former SecondDeputy Governor of the Bank of Ghana,faces the charge of “willfully causing finan-cial loss to the Republic,” for allegedlyapproving “the disbursement of GH¢300million unsecured facility to UniversalMerchant Bank Limited for the benefit of

uniBank without following prescribedmandatory statutory conditions.”

The other 7 accused persons are Dr.Kwabena Duffuor II; Ekow Nyarko Dadzie-Dennis, the chief operating officer of thebank; Kwadwo Opoku Okoh, the financialcontrol manager; Elsie Dansoa Kyereh,the executive head of corporate banking;Benjamin Ofori, the executive head of creditrisk; Jeffery Amon, a Senior RelationshipManager; and Hoda Holdings Limited.

They face various counts of money laun-dering, fraudulent breach of trust, andconspiracy to commit crime. Appearing inan Accra High Court on February 12, 2020,all of the accused pleaded not guilty to thecharges levelled against them.

Interestingly, the Attorney-General,Gloria Akuffo, a relative of the President,was herself in court to lead a team of statelawyers to prosecute the case, despite the11-page letter written by her Office 15months ago, and signed on her behalf byher deputy, Yeboah Dame, saying the gov-ernment got everything wrong on uniBank.

Opposing the AG was Dr. Duffuor’s


Attorney General and Minister of Justice, Gloria Akuffo (right), and her deputy, Godfred Yeboah Dame (left), have made a dramatic U-turn afterrebuking the government for breaking the law in shutting down uniBank in their January 2019 letter to Finance Minster Ken Ofori-Atta.


lawyer, Dr. Dominic Ayine, a formerDeputy Attorney-General, who urged thecourt to dismiss the charges because theywere “misconceived, erroneous, and withoutany legal basis”.

According to Dr. Ayine, by law, the rela-tionship between a banker and a depositoris premised on contract and not trusteeship,and since there is no relationship of trustbetween the accused and the depositors ofthe bank, it is wrong for the state to accusethem of a breach of trust.

“This means that by law, no money wasentrusted to any of the accused persons,”Dr. Ayine argued, adding that Dr. Duffuor,being a shareholder of uniBank, by law,only owed a fiduciary duty to the bank andnot to the depositors.

Therefore, as Section 119 of the Compa-nies Act 2019 (Act 992) says, the remedy fora breach of fiduciary duty of a shareholderis civil liabilities, not criminal liabilities,Dr. Ayine explained.

Turning to the presiding judge, JusticePhilip Bright Mensah, Dr. Ayine appealed:“Take a look at the charges and dismissthem.”

But Attorney-General Akuffo disagreed,saying Dr. Ayine’s submissions were pre-mature, thus at the appropriate time thestate would respond.

All the accused were granted bail in thesum of GH¢60 million each, with threesureties, two to be justified by way ofproviding justification of proof of ownershipof properties worth the bail sum.

Outside court, Dr. Duffuor’s otherlawyer, Kwame Gyan, said: “I have lookedat the charges and the facts they are using.Dr. Duffuor’s name shouldn’t have ap-peared on the charge sheet … Dr. Duffuoris not a shareholder of Hoda HoldingsLimited. He is not involved in the day-to-day management and operations of Hodaor even uniBank. He has only 16% ofthe shares of uniBank, so the rest of theuniBank shares are held by other share-holders.

“He left the Board of uniBank in 2009and has not since been part of uniBank orHoda. He has never been part of Hoda. Hewas part of uniBank, he left but kept hisshares. He is not on the uniBank manage-ment board. He is not a director of uni-Bank.”

Deputy Attorney-General writes

The current court case makes the Janu-ary 25, 2019 letter written by the Attorney-General’s Office a very poignant one indeed.In fact, looking at the circumstances, theletter, addressed to Finance Minister KenOfori-Atta, has become such a revolution-

ary object that it deserves to be quotedhere in full. Trying to paraphrase it will notdo justice to the vital points the Attorney-General’s Office liberally threw in the faceof the Finance Minister and the Governorof Bank of Ghana. So here is the full textof the letter written by Deputy Attorney-General Yeboah Dame on behalf of GloriaAkuffo, the Attorney General:

This Office is in receipt of a Noticeof Intention to join the Attorney-Generalto the suit [Nii Amanor Dodoo vrs Dr.Kwabena Duffuor & 16 others] pendingbefore the Commercial Division of the HighCourt, Accra. ·

[Nii Amanor Dodoo], the receiver of uni-Bank Ghana Ltd (uniBank) appointed bythe Bank of Ghana pursuant to Section123 of the Banks and Specialised Deposit-Taking Institutions Act 2016 (Act 930)instituted the case referred to above, seek-ing principally, an order for the refund of

the remainder of the sum of GH¢5,712,623,145 and an order for the return/trans-fer of some 34 properties among otherreliefs.

The 8th, 10th, and 14th defendants, ie,Dr. Kwabena Duffour II, Prof. NewmanKwadwo Kusi and Boatemaa KakraDuffour-Nyako, in accordance with Section10 of the State Proceedings Act 1998 (Act555), have issued a notice of intention tojoin the Attorney-General, in pursuance ofa counterclaim which seeks to raise issuesagainst the Republic.

Inter alia, the 8th, 10th and 14th defen-dants counterclaimed for the following:

A declaration that the entire procedureculminating in the purported appointmentof KPMG as an Official Administrator isunlawful, illegal, and contrary to the pre-vailing and acceptable practice and customof the banking industry and sector.

A declaration that the entire procedure

culminating in the purported appointmentof the plaintiff as receiver is unlawful,illegal and contrary to the prevailing andacceptable practice of the banking industryand sector.

A further declaration that the purportedexpropriation and transfer of uniBank’s‘good assets’ to the Ghana ConsolidatedBank Limited is ineffectual, contrary tolaw, wholly devoid of legality and thereforeought to be set aside.

The defendants make a number of alle-gations against the Ministry of Finance andthe Bank of Ghana (BoG), particularly,that, the President of Ghana was mis-led about the relevant facts informing theimpugned decisions culminating in therevocation of the licence of uniBank and theappointment of a Receiver.

The 8th, 10th and 14th defendantsfurther allege that had the Governmentof Ghana been provided with adequateopportunity and information by the Bankof Ghana, it would have been aware thatnon-discharge of the Government’s in-debtedness in excess of Gh¢1,400,000,000contributed to the dire situation of uni-Bank.

Upon service of the Notice to sue, thisOffice by a letter dated 17 December 2018,requested the BoG for documents and infor-mation in order to assist us in our opinion.By a letter dated 19 December 2018 signedby the Secretary, the BoG presented docu-ments on the matter, with the exception ofthe Purchase and Assumption Agreement.

We have examined all the processes anddocuments so far filed by the various par-ties in the matter, as well as the documentsreceived from BoG, and find the followingfacts as irrefutable and fundamental to anopinion on the legal issues arising in thesuit:

l An Official Administrator, KPMG, wasappointed by the Bank of Ghana for uni-Bank on 20 March 2018 for a period of6 months effective [from] the date ofannouncement (20 March 2018). The man-date of the Official Administrator wasstated in the press release by which thedecision to appoint was communicated, as,to rehabilitate and return the bank to reg-ulatory compliance and private ownershipwithin a period of 6 months.

l By a letter dated 22 June 2018, theOfficial Administrator notified the Ministryof Finance of overdue payments from Gov-ernment and Government-related entitiesto uniBank as at 31 May 2018, in the sumof GH¢868,973,599.10.

l By a letter dated 12 July 2018, aDeputy Minister for Finance acknowledgedreceipt of the letter from the OfficialAdministrator and indicated that the


“It is beyond dispute that the official administration [that]uniBank was placed under, terminated with the revocationof the licence of that bank andthe appointment of a receiverfor ‘selected assets and liabilities’. It seems that theseactions cannot be supported in terms of Section 122(2) of Act 930.”

“


Ministry was validating thenumbers with BoG.

l BoG, by a letter dated 1August 2018, revoked thelicence of uniBank.

l On 1 August 2018, a newbank, the Consolidated BankGhana Ltd (CBG) was incorpo-rated.

l CBG was issued with a cer-tificate to commence business on2 August 2018.

l By a press release dated 1August 2018, BoG announced thatit had granted ‘a universal bank-ing license’ to CBG.

l The press release statedfurther that BoG had transferredselected assets and liabilities ofuniBank and 4 other banks to CBG.

l By a letter dated 1 August2018, BoG appointed Nii AmanorDodoo of KPMG (previously theofficial administrator), as the re-ceiver in respect of ‘selected assetsand liabilities’ of the 5 banks.

l BoG claimed it had capitalisedthe CBG with an amount of GH¢450million for 6 months effective [from]the date of announcement (1 August2018).

l These actions by BoG were inpurported invocation of Section 123 ofAct 930 in support of these measures.

On the strength of the foregoing, wemake the following preliminary observa-tions on the matter and invite yourcomments thereon:

l The foundation for the impugneddecisions resulting in the appointmentof a receiver for uniBank in respect of‘selected assets and liabilities’ and thetransfer of selected assets and liabilitiesto an assuming bank, CBG, was theinitial appointment of an officialadministrator for the bank under Sec-tion 107 of Act 930. In the discharge ofits obligations, the official administrator,KPMG, was bound by the provisions ofSections 107 – 122 of Act 930. The validityof actions taken during the period of officialadministration of uniBank has to be meas-ured against these provisions of the statue.

l Section 114(3) requires an officialadministrator, not later than 90 days of hisappointment, to prepare and deliver to BoGa report on the financial condition andprospects of the bank or specialised deposit-taking institution. This is what KPMGsought to do by its report dated 20 June2018.

l The statutory report to be preparedunder Section 114(3) of Act 930 should in-dicate: (i) an assessment of the amount of

assets likely to be realised in a liquidationof the bank, and (ii) a proposal to make thebank carry out corrective measures in thenature of either a capital increase or meas-ures to minimise disruption to depositorsand preserve the stability of the bank.

l Section 114(5) also requires an officialadministrator, KPMG in the instant case,

to promptly provide any additional reportor information requested by BoG. We haveno information on any such additionalreport or information requested by theBank of Ghana, and therefore considerthe KPMG report of 20 June 2018 as thereport prepared pursuant to Section114(3).

The measures which KPMG, with theapproval of the Bank of Ghana, is autho-rised to institute in order to ensurecapital increase and boost the stabilityof the bank, consequent on the deliveryof its report and on the strength ofsame, are spelt out in:

l Section 115 – capital increase byexisting shareholders.

l Section 116 – recapitalisation bynew shareholders.

l Section 117 – mergers, sales andother restructuring like transfer ofassets and liabilities to a bridge insti-tution or asset management vehicleestablished by the government.

l Section 118 – mandatoryrestricting of liabilities.

l Section 119 – removal ofdirectors and key manage-ment personnel.

It is apparent from the fore-going that revocation of licenceof a bank or specialised deposit-taking institution or the ap-pointment of a receiver are notpart of the actions that maybe taken pursuant to a reportprepared under Section 114.

Section 122 of Act 930 enjoinsofficial administration to con-tinue until the expiry of theperiod specified in the decision toappoint the official administrator.In the instant case, the decision toappoint an official administratorfor uniBank, specified the periodof administration as 6 months.It is beyond controversy that theperiod of administration in theuniBank matter terminated by 1

August 2018, undoubtedly earlier than thestatutorily prescribed period.

Section 122(2) specifies 4 circumstanceswithin which official administration mayvalidly terminate at an earlier time. Thisincludes situations where the Bank ofGhana determines that the bank or spe-cialised deposit-taking institution cannot berehabilitated or finds circumstances neces-sitating a revocation of the licence of thebank under Section 16 or liquidation of thebank in accordance with Sections 123 to 139of Act 930.

Section 122(6) stipulates that thedecision to terminate is to be based on ‘a



A copy of the Attorney-General’s January2019 letter that plainly told the governmentthat it was very wrong in the processes itused to shut down uniBank and note thehandwritten warning “keep under wraps”.

recommendation by the official administra-tor and a detailed report prepared by theofficial administrator supporting the recom-mendation’. It is clear from Section 122(6)that the report contemplated by that provi-sion is not the same as the statutory reportto be prepared by the official administra-tion within 90 days of assuming officestipulated by Section 114(3).

We have not sighted any report preparedby KPMG other than the report of 20 June2018, in which a recommendation for anearlier termination of the official adminis-tration was made. Please furnish us withany such report if same is available.

The opinion just expressed is anchoredon 3 grounds:

l Firstly, a scrutiny of the measures thatthe law permits an official administrator totake pursuant to the preparation of a reportunder Section 114(3) – set out in Sections115, 116, 117, 118 and 119, will show thateach of them is prefixed with the words‘on the basis of the report produced underSection 114…’. This is conspicuously notthe case for the detailed report required tobe prepared by the official administratorunder Section 122(6) recommending atermination of the official administration.

l Secondly, it is beyond dispute that theofficial administration [that] uniBank wasplaced under, terminated with the revoca-tion of the licence of that bank and the ap-pointment of a receiver for ‘selected assetsand liabilities’. It seems that these actionscannot be supported in terms of Section122(2) of Act 930. As observed above, Sec-tion 122(2) stipulates 4 circumstancesunder which official administration mayvalidly terminate at an earlier time, includ-ing a situation necessitating a revocation ofthe licence of the bank under Section 16 orliquidation of the bank in accordance withSections 123 to 139 of Act 930.

Thus, based on the clear language ofSection 122(2), any revocation of licencepursuant to a recommendation of theofficial administrator under Section 122may be done in accordance with Section 16of Act 930. It is undeniable that [the] revo-cation of the licence of uniBank was notbased on Section 16 of Act 930, because thiswould have required compliance with theprovisions of that Section which furtherstipulates the provision of notice in writingto the bank, specification of the proposedaction and the grant of at least 30 daysopportunity to the bank to make writtenrepresentation. It therefore cannot beasserted that the termination of official ad-ministration was effected in accordancewith Section 122 of Act 930.

l Thirdly, it is also not the case that uni-Bank has been liquidated in accordance

with Sections 123 to 139 of Act 930. Liqui-dation under Sections 123 to 139 is aprocess involving recourse to the manda-tory procedures prescribed to be under-taken by a receiver duly appointed inaccordance with Section 123. It is incon-testable that the receiver did not pursue thegamut of mandatorily-prescribed actions inSections 123 to 139 before the assumptionof the selected assets and liabilities ofuniBank by CBG.

Fourteen (14) days after the terminationof official administration, the Official Ad-ministrator is required by Section 122(7) ofAct 930 to submit to the Bank of Ghana afinal report and accounting of official ad-ministration. There is no evidence on recordthat this has been done. Please furnish us

with information to that effect if same isavailable. A failure of KPMG to submit afinal report on its administration of uni-Bank may constitute a violation of Act 930.

We observe that by the decision of1 August 2018, the Bank of Ghana revokedthe licence of uniBank Ghana Ltd, ap-pointed Nii Amanor Dodoo of KPMG as thereceiver in respect of ‘selected assets andliabilities’ of 5 banks, including uniBank.BoG directed the execution by the receiverof a Purchase and Assumption transactionwith CBG for that bank to acquire andassume deposits, selected assets and liabil-ities of uniBank and 4 other banks. Theappointment of a receiver for uniBank andthe 4 other banks was done under Section123 of Act 930.

Our first comment is that, Section 123(1)empowers BoG to appoint a receiver as acorollary to the determination by the BoGunder Section 122(2) of Act 930. It is there-fore imperative that the processes requiredto be undertaken under Section 122 becomplied with before an appointment of areceiver under Section 123 may be valid.

Secondly, Section 123(3) provides thus:‘The receiver appointed under Subsection(2) shall take possession and control ofthe assets and liabilities of the bank orspecialised deposit-taking institution.’

The law enjoins a receiver duly appointedunder Section 123 to be vested with all as-sets and liabilities of the bank, and indeedplaces the receiver in the same position asthe shareholders, directors and key man-

agement personnel of the bank. The receiver is vested with the collective

rights and powers of the shareholders,directors and key management personnel ofthe bank. There is no provision in Act 930for a receiver appointed pursuant to Section123, to be vested only with ‘selected assetsand liabilities’, as stated in the letter ap-pointing the receiver. The thrust of thatletter together with statements containedin the official public announcements by theBank of Ghana all dated 1 August 2018was to transfer the ‘good assets and liabili-ties’ to another institution other than thereceiver.

The receiver, after complying with theprovisions of Section 125 of Act 930, uponappointment, manages the entire assetsand liabilities of the bank under receiver-ship and is required to control samethrough an exercise of the powers stipu-lated in Sections 129, 130, 131, 132, 135and 136 of Act 930.

From the decisions taken by BoG on1 August 2018, it is apparent that themandatory duties of a receiver, such aspublication and registration of notice ofreceivership and taking of an inventory ofthe assets and property of uniBank, andpublication of same in two daily news-papers of national circulation, were notdone before the receiver entered into aPurchase and Assumption transaction withCBG.

It appears that the decision to vest thereceiver only with the ‘bad loan assets’ ofuniBank and transfer of the ‘good assetsand liabilities’ to CBG stems from a failureto distinguish the provisions of Section 117from those of Section 123, which fundamen-tally differ.

A receiver appointed under Section123 does not derive his appointment fromthe power of the official administratorunder Section 117 of Act 930. His mandate,powers, and scope of duties are set out ina separate part of Act 930, ie, Sections 123to 139.

Further, the decision to appoint areceiver was not made under Section117 and therefore his mandate cannot belimited under Section 117. The compart-mentalisation of ‘good assets and liabilities’and ‘bad loan assets’ of uniBank is thusunknown to Section 123 of Act 930.

It is the opinion of this Office that areceiver appointed under Section 123 oughtto be given the opportunity to exercisehis full powers in relation to the affectedbank as set out in Sections 123 to 139 ofAct 930, before ultimately pursuing anyof the measures which may result in awinding up or disposal of the assets andliabilities of a bank or specialised deposit-


It is undeniable that [the] revocation of the licence of uniBank was not based onSection 16 of Act 930.


taking institution.We note that CBG was incorporated on 1

August 2018, and a certificate to commencebusiness was issued to that bank on 2August 2018. We also observe that selectedassets and liabilities of the 5 banks weretransferred to CBG on 1 August 2018 viaa Purchase and Assumption transaction,before the grant of a certificate to com-mence business.

Section 27 of the Companies Act, 1963(Act 179) prohibits a company incorporatedin Ghana from transacting a businessuntil it has satisfied the provisions therein,and has been issued with a certificate tocommence business. A violation of this pro-vision constitutes a criminal offence forwhich the company and every officer of thecompany shall suffer a penalty prescribedby Section 29 of Act 179.

The transfer of selected assets and liabil-ities of uniBank on 1 August 2018 is busi-ness, which CBG was not authorised by law

to engage in as at 1 August 2018.Section 9 of Act 930 also sets out the

conditions for the grant of a banking licenceto a company incorporated in Ghana tocarry out the business of banking. Sections10 and 12 provide for how a provisionalbanking licence and final banking licencerespectively, may be granted to a bank.Please indicate if these conditions weresatisfied by CBG before 1 August 2018,when a Class 1 Banking Licence was issuedto CBG. We make this request because Act930 applies to all banks and specialiseddeposit-taking institutions operating inGhana. There is no provision for an exemp-tion, save as is stated in Section 1(2).

We have presented these preliminaryobservations in order for the government tohave a proper appreciation of the circum-stances of the suit to which the defendantsseek to join the Attorney-General, and toenable us determine within the frameworkof the report prepared by KPMG pursuant

to Section 114 of Act 930, the measures andoptions that may be competently explored.

Further, the provision of informationrequested in the foregoing paragraphs willassist this Office in addressing the concernsexpressed above. Thank you.

The letter was signed officially byGodfred Yeboah Dame, Deputy Attorney-General & Deputy Minister for Justice, forthe Attorney General and Minister forJustice.

Conclusion

As a capstone to the deceit that wenton as outlined in the Attorney-General’sletter, on the last page of the letter, on page11, just across from the Deputy Attorney-General’s signature, somebody had min-uted: “Keep under wraps”.

The Attorney-General’s letter is sodisarming that it beggars belief that thegovernment still had the stomach to takeDr. Duffuor and the others to court, insteadof sorting out the mess the governmentcaused by breaking the law of the countryin its pursuit of shutting down uniBank. Ifthe government has the freedom to breakthe country’s laws at will, as seen inthe uniBank case, what relief is there forordinary citizens?

Shouldn’t Section 27 of the CompaniesAct, 1963 (Act 179) be invoked in thismatter? As the Attorney-General’s letterexplained: “Section 27 of the CompaniesAct, 1963 (Act 179) prohibits a companyincorporated in Ghana from transacting abusiness until it has satisfied the provisionstherein, and has been issued with a certifi-cate to commence business.

“A violation of this provision constitutesa criminal offence for which the companyand every officer of the company shallsuffer a penalty prescribed by Section 29 ofAct 179.”

As the government and its various agents– including Finance Minister Ofori-Atta,the Bank of Ghana, and CBG – all have ap-parently openly violated Section 27 of theCompanies Act, the big question to thisdebacle must be whether they will now beman enough to step forward and face themusic and the very real consequences thatthis violation has revealed? And in thatprocess of investigation, the people ofGhana who suffered the catastrophic eco-nomic consequences of uniBank’s collapsewill also want to know why the Office of theAttorney-General has decided to do such anabout-face regarding the “illegal” acts thatdeliberately caused uniBank’s demise inthe first place. n


Dr. Kwabena Duffuor and his son, Dr. Kwabena Duffuor II (R), the CEO of the defunct uniBank, atthe 2017 edition of the Exclusive Men of the Year (EMY) Africa Awards ceremony in Accra wherethe senior Duffuor was crowned the Ultimate Man of the Year and recognized as a symbol ofgreatness. They hope to get uniBank’s license back through a judicious pursuit of the law.

”
