Abronye is weak and poor in financial issues – NPP Communication Director

The Communication Director for the ruling New Patriotic Party in the Sunyani East Constituency, Mr Maxwell Mahama, has taken a swap on Abronye, his Regional Chairman.

In a write-up by the Sunyani East Communication Director of the NPP, Mr Maxwell Mahama described the knowledge of his Regional Chairman as ”weak and poor” in accounting, banking and financial issues.

This was revealed in a write-up titled ”what the public must know”, a write-up, described by many, as a response to an earlier write-up by Abronye DC, indicting State Prosecutors in the Ato Essien case for their supposed ”compromise”.

Kindly read the full write-up below

What the public must know by Maxwell Mahama

SO, DOES ABRONYE DC READ TO UNDERSTAND OR SOMEONE HAS BEEN WRITING FOR HIM?

I personally believe that Kwame Baffoe a.k.a Abronye DC who is the Bono Regional Chairman of the New Patriotic Party and a Member of the National Council as well as member of National Executive Committee of the New Patriotic Party should be well reasonable in his public alterances.

Abronye DC’s personal hatred for government appointees of President Akufo-Addo’s government must be called to order.

It is erroneous, uncharacteristic and unwarranted for him to attack the entire Attorney General Department and alleging acts of corruption and underground dealings particularly in case of The Republic v Williams Atto Essien & Ors.( accused persons)

His naivety that the Attorney General and Ministry of Justice charged the accused persons with ghc620 million and later compromised its stance and turnaround chasing the accused persons ghc90 million for the state is borne out of total illiteracy and lack of appreciation of facts. It clearly shows that Abronye is weak and poor in accounting, banking and financial issues.

Abronye unfortunately described the state prosecutors as being interested in the prosecution of persons who steal cassava and goat and adjourn cases of murder and causing financial loss to the state.

In my opinion the above assertions by the Bono Regional Chairman is provocative and lack of respect that he has for the state prosecutors even though he is characterized by those ill motives and notoriously known for the exhibition of his ignorance all the time. He is also challenged in understanding of public issues particularly the laws of Ghana.

The truth is that the accused persons were never charged with ghc620 million as alleged by Abronye DC and the High Court Judge never accused the office of the Attorney General or the state prosecutors as being compromising with the accused persons.

Before I conclude on these matters, let me first of all give you a brief background of the CAPITAL BANK ISSUES.

Capital Bank was one of the first banks that collapsed after a massive clean-up of financial institutions by the BoG started in 2017.
On August 14, 2017, its licence and that of UT Bank were revoked by the BoG, after the BoG had declared them insolvent.

The BoG allowed the state-owned bank, the GCB Bank, to acquire the two banks in order to protect depositors’ funds and also enable them to stay afloat.
The hurricane that swept through the banking sector due to the collapse of the two banks further heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity — Consolidated Bank, Ghana.

On August 14, 2017, the BoG in its press release announced its approval for the takeover of two indigenous banks, UT Bank LTD and Capital Bank LTD, by GCB Bank LTD. BoG cited the insolvency of the banks in question, as the major reason for the revocation of their operation licenses. According to BoG, upon several agreements with the banks to increase their capital requirements, managers of the banks failed. Consequently, to protect customers, the licenses of the banks were revoked under a Purchase and Assumption transaction with GCB Bank LTD. Roughly after a year later, on August 1, 2018, the BoG announced the consolidation of five indigenous banks to form a new bank called the Consolidated Bank Ghana LTD. The five collapsed banks included Unibank Ghana Ltd, The Royal Bank LTD, Beige Bank LTD, Sovereign Bank LTD, and Construction Bank LTD[4] The same reason of insolvency was cited as a cause of the collapse of the various banks.[5] Within a span of two years, about seven indigenous banks have collapsed.[6]

Causes of the collapse of the Banks

1.Corporate governance

Poor corporate governance has been cited as one of the major causes of the collapse of the seven banks by BoG, and other financial analysts. Board level and senior management were either inactive or engaged in activities that inured to their personal interests rather than to the growth of the banks. For instance, there was the observation that most of the non-performing loans were advanced to people who were related to senior board managers.Furthermore, Board of Directors of banks failed to oversee bank accounting and corporate reporting systems as well as the external auditing system due to lack of experience or greed. In addition, Board of Directors failed to provide proper functioning risk management framework. There was also the lack of independence and integrity among Chief Internal Auditors in most of the collapsed banks, leading to cover-ups for executive directors during review processes.The general non-adherence to policies of corporate governance has greatly contributed to the collapse of these banks.

2. Non-performing Loans

Non-performing loans is another key cause of the collapse of some of the banks. According to BoG, the banking sector assets quality remained a major concern as banks’ stock of non-performing loans and the non-performing loans ratio remained high.It was observed that most of the collapsed banks had huge non-performing loans on their balance sheets. Non-performing loans affects the banks in the following way, amongst others: increase in operating costs, leading to decrease in profitability.This has financial ramifications for banks, which may cause capital reduction leading to undercapitalization.

3. Credit risk

Credit risk refers to the risk that a borrower will default on a loan obligation to a bank or the issuer of a security held by a bank will default on its obligations. Credit risk may arise in cases of inadequate income, loss in business, death, unwillingness and other reasons, on the side of the borrower. Large losses generated by defaults of borrowers or issuers of security can lead to insolvency and possibly to the bankruptcy of a bank. It was alleged that there was too much connivance in local banks to pick loans without any recourse to paying back or following appropriate policies. Furthermore, due to bad corporate governance, appropriate risk management practices to reduce credit risks such as proper monitoring and measuring mechanisms were not observed in credit deliveries.

4. Regulatory Lapses

Regulatory lapses the central bank of Ghana is the chief regulator of Ghana’s banking system. They prescribe the legal and regulatory framework for the financial sector of the country. In its press release statement, BoG stated that

…regulatory non-compliance, and poor supervision, (questionable licensing processes and weak enforcement) lead to a significant build-up of vulnerabilities in the banking sector.

All these responsibilities quoted above, falls within the regulatory and supervisory role of the central bank of Ghana. Under any circumstance, the regulator is solely responsible for reading the proactive constructs of the provisions made within the laws to protect activities within the sector, in other to prevent situations of dire

5. Debt

Capital Bank was declared insolvent by BoG in August 2017. Its liabilities greatly exceeded its assets. According to the financial analyst, Sydney Casely-Hayford, noncollectable debts of GH₵11 billion owed to Capital Bank and UT Bank resulted in the collapse of the banks.

6. Questionable License Process

It was reported that Capital Bank LTD procured its license under false pretense.

7. Bad Risk Management and Funds Embezzlement

A report was made that Capital Bank collapsed because major shareholder William Ato Essien treated depositors funds and public funds as though they were his personal funds.[33]
The liquidity support of GH₵620 million, that was issued by the central bank of Ghana to Capital Bank to cure its liquidity struggles was allegedly mismanaged, leading to its collapse.

Now the terms of settlement between the state and the accused persons as filed by the Court :

AND WHEREAS the total amount involved in the charges preferred against the 1 st accused person is One Hundred and Ninety-Two Million, Five Hundred Thousand Ghana Cedis

AND WHEREAS the record shows that a total amount of One Hundred Million Ghana Cedis ( GHC was retrieved by Capital Bank when transfers of Sixty-Five Million Ghana Cedis and Thirty-Five Million Ghana Cedis by the 1 st accused person to Capital Bank for the purchase of shares in the Bank for Capital Africa Group were withheld by Capital Bank;

AND WHEREAS an amount of One Million, Three Hundred Thousand Ghana Cedis was refunded by the 1st accused person to the Economic and Organised Crime Office in the course of investigations;

AND WHEREAS the 1 st accused person agrees that after conviction, his offer of reparation and restitution may be accepted by the court in lieu of sentence and that this is subject to the conditions directed by the Court ;

FINALLY:

The Republic v Atto Essien & Ors

This is a summary of the whole issues as filed in the court. The whole amount is Ghs192million

So it is never 620 million as alleged by Abronye the Bono Regional Chairman.

Abronye got all his facts wrong. The total amount in the charge sheet is GHS192million out of which through investigations, about 102million was recovered leaving 90million.

So how can Abronye say the state prosecutors are taking ghc90 million for the state and questioned why the state prosecutors pocketed ghc530 million which he intends to denigrate the whole Attorney General department?

He is totally empty!

We must call him to irder as a Political Party before things get out of hand.