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I Got GH¢27m For Business Promo – Ato Essien

William Ato Essien, Founder and Chief Executive Officer of defunct Capital Bank who is standing trial for his alleged role in the collapse of the private bank has said he received GH¢27 million for the role he said he played in securing GH¢620 million as liquidity support from the Bank of Ghana.

The Bank of Ghana released GH¢620 million to the insolvent bank as liquidity support but according to the prosecution, the managers of the bank including defunct bank’s former Managing Director, Fitzgerald Odonkor as well as Tetteh Nettey, a former Managing Director of MC Management Service owned by Mr. Essien, allegedly misappropriated the taxpayers fund that was to rescue the private bank.

Business Promotion

Ato Essien read his 58-paragraph witness statements at an Accra High Court yesterday where he admitted receiving GH¢27 million for what he called ‘Business Promotion’.

Mr. Essien stated that the GH¢27.5 million that was paid to him as business promotion was as a result of the role he played for the contraction and provision of commercial assets and liabilities to the bank, which he claims was a normal practice in the banking industry at the time.

He said that was not the first time Capital Bank had paid money to any individual as business promotion, adding that the money was not meant to bribe officials of BoG but paid to the person whether from the bank or otherwise as a form of honouring the commercial arrangement between the bank and the arranger.

“It is my understanding that granted (without admitting) that a Bank may have acted contrary to a policy of the Central Bank, and paid me a commission by reason of my role in the acquisition of the Commercial Loan at a commercial interest under a commercial arrangement for the Bank same is not a criminal act under the law,” he said.

He added that, “I never misled, compelled or even through duress or force the Capital Bank to pay me the said commission amount. In fact, the said commission was approved by the officers of the Bank by a resolution of the board and a copy of the said resolution has already been tendered in evidence.”

He said he only agreed to refund the money because he had just been arrested and the officers threatened to detain him for 48 hours unless he was willing to refund the money he received, adding that “In order to avoid being kept in custody I promised to pay the money and even went ahead to pay part.”

No Conspiracy

Ato Essien denied conspiring with anyone to commit any crime when he was in charge of the insolvent bank.

He said “there was no agreement between myself and 2nd and 3rd accused person to act together for the sole purpose to commit a crime.”

He also stated that, “I have not acted with either the 2nd or 3rd accused persons to act together or facilitate the transfers or movement of the legitimate investments by the Capital Bank.”

Again, he indicated that he was “never involved in the day-to-day running of the bank as some of the prosecution witnesses testified to.”

GH¢620m Support

Giving the genesis of the liquidity support from the Central Bank, Mr. Essien indicated that between June 2015 and November 2016, Capital Bank applied for and received GH¢620 million from the Bank of Ghana as a commercial loan at an interest of 23 per cent per annum to support the banks business and to enable it satisfy maturing debt obligations.

He said the interest on the commercial loan was a whooping GH¢14 million monthly, which Capital Bank never defaulted.

Ato Essien indicated that a total of GH¢240 million of the commercial loan contracted from the BoG had been paid in principal and interest payments at the time of the government takeover.

“I have knowledge of this because at the time of the said application by Capital Bank I was required by the management as a shareholder to help negotiate the commercial loan and it terms, and this role I executed perfectly as Capital Bank was given the liquidity which is a commercial loan at a commercial interest under a commercial arrangement that it had requested for,” he said.

Project Eagle

Ato Essien further stated in his witness statement that the Project Eagle, a report by the receiver of the bank on investigations into the activities of the bank never called him to respond to any allegations made against him.

“I wish to categorically state that at no point in time was I ever called to respond to any of the wild allegations levelled against me in the said report, and so it comes not as a surprise as to how the people who were tasked to investigate the issues that led to the collapse of the banks came to those hasty conclusions which has now become the basis for my prosecution in this court. This issue of the deliberate attempt on the part of the receiver to completely ignore me and not taking into account that the entire exhibit VVV1 (report) is the basis for my prosecution should be brought to the attention of this court.”

Fund Transfers

Ato Essien also talked about transfer of funds which he said were legitimate investments made by the bank.

He stated, for instance that in October 2015, Capital Bank acting through its directors, caused a commercial paper totalling GH¢130 million to be issued to Alltime Capital Limited at the bank’s agreed interest rate for the period of the commercial paper.

He said all the memos sanctioning the transfer of funds from the bank to Alltime Capital were generated by the bank’s treasury and minute upon by the respective officials of the bank, who were charged with the mandate to sanction such transfers or financial arrangements.

“I played no role in Capital Bank’s decision to issue the said commercial paper to Alltime Capital Limited, and had no command over any approvals that went into effecting same as I was at the time, neither a member of the board of directors of Alltime Capital Limited nor in a managerial position at the Capital Bank.”

He went on to state that “the investment as made by Alltime Capital, I would say is clearly in tandem with practice of Alltime Capital as an investment company, and the said monies received by MC Management Limited, was for the purpose of MC Management’s business.

Big Request

The fact in any case is that MC Management had requested for a total of GH¢215,000,000.00 from Alltime Capital Limited for over a period of 12 months, for which only GH¢130,000,000.00 of same was issued by Alltime Capital.

That the real estate project, for which reason Alltime Capital Limited issued the GH¢130,000,000 to MC Management was delayed due to technical reasons, as a result of which a private arrangement by management was made to invest the money through the shareholders of Sovereign Bank Limited instead.

Again, he said the total amount of GH¢130 million contracted by MC Management Company Limited from Alltime Capital Ltd was invested through the shareholders of Sovereign Bank Limited.

“Sovereign Bank Limited in turn placed a total of GH¢100,000,000 of the fixed deposit with Nordea Capital Limited, who then issued a commercial paper to Capital Africa Group Limited of an amount totalling GH¢100,000,000.00 [making up ¢65,000,000.00 and ¢35,000,000], for a 12-calendar month period.”

Finally, Capital Africa Group which is a separate legal entity “deposited the total sum of GH¢100,000,000.00, (made up of individual amounts of GH¢65,000,000. and GH¢35,000,000 respectively) back into Capital Bank Limited, for the purposes of acquiring shares in Capital Bank,” he added.

Sitting continues on February 2.

The Bank of Ghana released GH¢620 million to the insolvent bank as liquidity support but according to the prosecution, the managers of the bank including defunct bank’s former Managing Director, Fitzgerald Odonkor as well as Tetteh Nettey, a former Managing Director of MC Management Service owned by Mr. Essien, allegedly misappropriated the taxpayers fund that was to rescue the private bank.

Business Promotion

Ato Essien read his 58-paragraph witness statements at an Accra High Court yesterday where he admitted receiving GH¢27 million for what he called ‘Business Promotion’.

Mr. Essien stated that the GH¢27.5 million that was paid to him as business promotion was as a result of the role he played for the contraction and provision of commercial assets and liabilities to the bank, which he claims was a normal practice in the banking industry at the time.

He said that was not the first time Capital Bank had paid money to any individual as business promotion, adding that the money was not meant to bribe officials of BoG but paid to the person whether from the bank or otherwise as a form of honouring the commercial arrangement between the bank and the arranger.

“It is my understanding that granted (without admitting) that a Bank may have acted contrary to a policy of the Central Bank, and paid me a commission by reason of my role in the acquisition of the Commercial Loan at a commercial interest under a commercial arrangement for the Bank same is not a criminal act under the law,” he said.

He added that, “I never misled, compelled or even through duress or force the Capital Bank to pay me the said commission amount. In fact, the said commission was approved by the officers of the Bank by a resolution of the board and a copy of the said resolution has already been tendered in evidence.”

He said he only agreed to refund the money because he had just been arrested and the officers threatened to detain him for 48 hours unless he was willing to refund the money he received, adding that “In order to avoid being kept in custody I promised to pay the money and even went ahead to pay part.”

No Conspiracy

Ato Essien denied conspiring with anyone to commit any crime when he was in charge of the insolvent bank.

He said “there was no agreement between myself and 2nd and 3rd accused person to act together for the sole purpose to commit a crime.”

He also stated that, “I have not acted with either the 2nd or 3rd accused persons to act together or facilitate the transfers or movement of the legitimate investments by the Capital Bank.”

Again, he indicated that he was “never involved in the day-to-day running of the bank as some of the prosecution witnesses testified to.”

GH¢620m Support

Giving the genesis of the liquidity support from the Central Bank, Mr. Essien indicated that between June 2015 and November 2016, Capital Bank applied for and received GH¢620 million from the Bank of Ghana as a commercial loan at an interest of 23 per cent per annum to support the banks business and to enable it satisfy maturing debt obligations.

He said the interest on the commercial loan was a whooping GH¢14 million monthly, which Capital Bank never defaulted.

Ato Essien indicated that a total of GH¢240 million of the commercial loan contracted from the BoG had been paid in principal and interest payments at the time of the government takeover.

“I have knowledge of this because at the time of the said application by Capital Bank I was required by the management as a shareholder to help negotiate the commercial loan and it terms, and this role I executed perfectly as Capital Bank was given the liquidity which is a commercial loan at a commercial interest under a commercial arrangement that it had requested for,” he said.

Project Eagle

Ato Essien further stated in his witness statement that the Project Eagle, a report by the receiver of the bank on investigations into the activities of the bank never called him to respond to any allegations made against him.

“I wish to categorically state that at no point in time was I ever called to respond to any of the wild allegations levelled against me in the said report, and so it comes not as a surprise as to how the people who were tasked to investigate the issues that led to the collapse of the banks came to those hasty conclusions which has now become the basis for my prosecution in this court. This issue of the deliberate attempt on the part of the receiver to completely ignore me and not taking into account that the entire exhibit VVV1 (report) is the basis for my prosecution should be brought to the attention of this court.”

Fund Transfers

Ato Essien also talked about transfer of funds which he said were legitimate investments made by the bank.

He stated, for instance that in October 2015, Capital Bank acting through its directors, caused a commercial paper totalling GH¢130 million to be issued to Alltime Capital Limited at the bank’s agreed interest rate for the period of the commercial paper.

He said all the memos sanctioning the transfer of funds from the bank to Alltime Capital were generated by the bank’s treasury and minute upon by the respective officials of the bank, who were charged with the mandate to sanction such transfers or financial arrangements.

“I played no role in Capital Bank’s decision to issue the said commercial paper to Alltime Capital Limited, and had no command over any approvals that went into effecting same as I was at the time, neither a member of the board of directors of Alltime Capital Limited nor in a managerial position at the Capital Bank.”

He went on to state that “the investment as made by Alltime Capital, I would say is clearly in tandem with practice of Alltime Capital as an investment company, and the said monies received by MC Management Limited, was for the purpose of MC Management’s business.

Big Request

The fact in any case is that MC Management had requested for a total of GH¢215,000,000.00 from Alltime Capital Limited for over a period of 12 months, for which only GH¢130,000,000.00 of same was issued by Alltime Capital.

That the real estate project, for which reason Alltime Capital Limited issued the GH¢130,000,000 to MC Management was delayed due to technical reasons, as a result of which a private arrangement by management was made to invest the money through the shareholders of Sovereign Bank Limited instead.

Again, he said the total amount of GH¢130 million contracted by MC Management Company Limited from Alltime Capital Ltd was invested through the shareholders of Sovereign Bank Limited.

“Sovereign Bank Limited in turn placed a total of GH¢100,000,000 of the fixed deposit with Nordea Capital Limited, who then issued a commercial paper to Capital Africa Group Limited of an amount totalling GH¢100,000,000.00 [making up ¢65,000,000.00 and ¢35,000,000], for a 12-calendar month period.”

Finally, Capital Africa Group which is a separate legal entity “deposited the total sum of GH¢100,000,000.00, (made up of individual amounts of GH¢65,000,000. and GH¢35,000,000 respectively) back into Capital Bank Limited, for the purposes of acquiring shares in Capital Bank,” he added.

Sitting continues on February 2.

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