An Accra High Court has accepted the terms of the settlement reached between the state and William Ato Essien, founder of defunct Capital Bank.
This was after state prosecutors and lawyers for Ato Essien advanced arguments to convince the court that the settlement terms were in the state’s interest.
As part of the agreement, Mr Essien has already paid an amount of GH¢30 million out of the GH¢90 million he agreed to pay.
He will pay the remaining GH¢60m in three instalments, GH¢20 million each on April 28, August 31, and December 15, 2023.
Justice Eric Kyei Baffour accepted the agreement according to Section 35 of the Courts Act, 1993 (Act 459), which allows accused persons standing trial for causing financial loss to the state to pay the money.
While suspending the custodial sentence based on the agreement, the court said should he default in the payment of the first installment on April 28, 2023, he should be arrested and brought before the court immediately.
He will be made to serve a custodial sentence should he default.
The founder of the defunct Capital Bank has also been prohibited from holding any key position in any bank or financial institution.
Mr Essien is on trial with two others — Rev. Fitzgerald Odonkor and Tetteh Nettey — for their roles in the collapse of the defunct Capital Bank.
They were charged with 23 counts of conspiracy and stealing from the GH¢620 million liquidity support given to Capital Bank by the Bank of Ghana (BoG) to enable it to service its maturing debts.
The accused persons, according to the prosecution, opened various bank accounts with Capital Bank through which the GH¢620 million BoG liquidity support was transferred while others were carried in jute bags to Ato Essien.
The accused persons earlier pleaded not guilty, but Ato Essien changed his plea to guilty, leading to the agreement between the parties.
When the case was called on Tuesday, the Deputy Attorney General, Alfred Tuah-Yeboah, explained that Section 35 was applicable because the Bank of Ghana revoked the licence of Capital Bank and the assets and liabilities of the bank were taken over by the Ghana Commercial Bank which is a state agency.
He said the government has, over the years, paid over GH₵25 billion to depositors due to the revocations of the licences of underperforming banks, including Capital Bank, resulting in a loss to the state.
Asked how the state arrived at the GH₵90 million, Mr. Tuah- Yeboah said the total amount stolen by Ato Essien was GH₵192 million, but investigations revealed that two shares worth GH₵65 million and GH₵35 million were bought using the bank’s own monies so the shares were reversed and the monies were retained by the bank, leaving an outstanding amount of GH₵92 million.
He added that Ato Essien also paid an amount of GH₵1.2 million to the Economic and Organised Crime Office (EOCO) during investigations into the matter.
“This further reduces the outstanding amount to GH₵90.7 million. The records on these transfers and transactions are before this court,” he added.
Counsel for Ato Essien, Thaddeus Sory, argued that the GH₵90 million to be paid as reparation and restitution indicated that there was an amount of GH₵35 million that was not accounted for.
He said the GH₵35 million, which was the subject matter of counts 1 to 4, was repeated in counts 9 to 11, thereby resulting in double accounting, “indicating that after painstaking discussions, the Attorney General negotiated an extra GH₵30 million, which the first accused agreed to pay”.
“So with regard to the interest component, the GH₵30 million takes care of that,” Mr. Sory added.
Justice Kyei Baffour, after listening to the parties, accepted the agreement, indicating that adjusting the total sum any further may overreach Ato Essien pursuant to the agreement reached.
“I will therefore accept the agreement,” he stated.
Background
Capital Bank was one of the first banks that collapsed after a massive clean-up of financial institutions by the Bank of Ghana (BoG) starting in 2017.
On August 14, 2017, its licence and UT Bank were revoked by the BoG after the central bank had declared them insolvent.
The central bank allowed the state-owned bank, the GCB Bank, to acquire the two banks to protect depositors’ funds and enable them to stay afloat.
The hurricane that swept through the banking sector due to the collapse of the two banks heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity — Consolidated Bank, Ghana.