Capital Bank Collapse: Ato Essien refunds GHC1.4m to the state

Former Chief Executive Officer of the now in receivership, Capital Bank Limited, William Ato Essien, has admitted guilt in respect of charges preferred against him by the State over misappropriation of liquidity support he obtained from Bank of Ghana (BoG) to revive Capital Bank Limited.

He has indicated that he is willing to pay back about GHS 27 million to the state.

Ato Essien is alleged to have used the GHS27.5 million for business promotion and allegedly carted the money in jute bags and distributed it to some people.

Lawyer for the accused person, Baffour Gyawu Bonsu Ashia, who held the brief of Thaddeus Sory when the matter came up for hearing on Thursday, 21 May 2020 told Justice Eric Kyei Baffour’s Court that his client has initiated processes based on the provisions of section 35 of the Courts Act, 1993 (Act 459), to admit the offence and to offer compensation or make restitution and reparation for the loss, harm or damage caused by him against the State.

The lawyer told the court that his client had already refunded GHS1.4 million of the GHS27.5 million and also returned some 19 newly-cleared cars to the state.

Section 35 of Courts Act

Section thirty-five (35) of the Courts Act, 1993, (Act 459) states as follows: “(1) Where a person is charged with an offence before the High Court or a Regional Tribunal, the commission of which has caused economic less, harm or damage to the State or a State agency, the accused may inform the prosecutor whether the accused admits the offence and is willing to offer compensation or make restitution and reparation for the loss, harm or damage caused”.

(2) “Where an accused makes an offer of compensation or restitution and reparation, the prosecutor shall consider if the offer is acceptable to the prosecution” .

(3) “If the offer is not acceptable to the prosecution the case before the Court shall proceed” .

(4) “If the offer is acceptable to the prosecution, the prosecutor shall in the presence of the accused, inform the Court which shall consider if the offer of compensation or restitution and reputation is satisfactory”.

(5) “Where the Court considers the offer to be satisfactory, the Court shall accept a plea of guilty from the accused and convict the accused on that plea, and in lieu of passing sentence on the accused make an order for the accused to pay compensation or make restitution and reparation”.

Flowing from the provision of the Court Act, it is clear that Mr. William Ato Essien, intends to plead guilty, pay compensation to the State and avoid custodial sentence.

State Prosecutors

State Prosecutors after the argument of the lawyer of the first accused person, Baffour Gyawu Bonsu Ashia, confirmed that indeed, Mr. Essien has initiated processes in line with section 35 of the Courts Act. They therefore requested for a long adjournment to allow the process to be completed.

By Court

Justice Eric Kyei Baffour obliged them and adjourned sitting to the 18th of June 2020. He indicated that at the next Court sitting, he would expect the State to furnish him with documents to demonstrate their satisfaction or otherwise of the offer of compensation or restitution and reparation by the accused person for further consideration by the Court.

The Charges

William Ato Essien, Tetteh Nettey, Fitzgerald Odonkor and Kate Quartey-Papafio have been charged with twenty six (26) Counts of Conspiracy to Steal contrary to section 23 (1) and 124 (1) of the Criminal and Other Offences Act, 1960 (Act 29), Abetment of crime namely stealing contrary to section 20 (1) and 124 (1) of the Criminal and Other Offences Act, 1960 (Act 29), Stealing contrary to section 124 (1) of the Criminal and Other Offences Act, 1960 (Act 29), and Money Laundering contrary to section 1 (1) a of the Anti Money Laundering Act, 2008 (Act 749).

Facts of the case

According to the facts sheet, “the 1st accused person, William Ato Essien, was the majority shareholder of Capital Bank Limited (Capital Bank), a wholly owned Ghanaian Bank which previously operated as a microfinance company. The 2nd accused person, Tetteh Nettey, was the Managing Director of MC Management Services, a company established by the 1st accused person purposely for the promotion of the incorporation of Sovereign Bank, another brain child of the 1st accused person”. “The 3rd accused person, Fitzgerald Odonkor, was the Managing Director of Capital Bank from June 2015 to August 2017 and the 4th Accused person, Kate Quartey-Papafio, is a businesswoman and Chief Executive Officer of Reroy Cables Company Limited”.

The facts further states that “between June 2015 and November 2016, pursuant to an application by Capital Bank, the Bank of Ghana (BOG) provided a total sum of GHS 620 million as liquidity support to Capital Bank to enable it meet its capital adequacy ratio and to enable it service its maturing debt obligations”. “In October 2015, the 1st accused person, aided by the 3rd accused person, caused a transfer of a sum of GHS120 million of the liquidity support amount to All Time
Capital Limited (All Time), an investment management and advisory firm. At the instance of the 1st, 2nd and 3rd accused persons, GHS100million of the GHS120 million which had been transferred to All Time, was further transferred to MC Management Services while GHS 20 million of the amount of GHS 120 million was transferred to Pronto Construction and Supplies Limited (Pronto Construction)”.

” The sum of GHS100 million which was transferred to MC Management Services was subsequently represented by the 2nd accused person to BOG as initial Capital of Sovereign Bank while the GHS 20 million that was transferred to Pronto Construction was used by the Managing Director of Pronto Construction, ostensibly to purchase shares in Capital Bank”.

“Again, at the instance of the 1st and 3rd accused persons, GHS 65 million out of the BOG liquidity support of GHS 620 million was transferred to Nordea Capital Limited described as an investment bank. Of the amount of GHS 65 million, the 1st accused person, aided by the 3rd accused person, caused GHS 30 million to be transferred to MC Management Services which was represented to BOG as additional initial capital of Sovereign Bank by the 2nd accused person”.

The fact goes on to state that “with the aid of the 3rd accused person, the remaining GHS 35 million of the GHS 65 million was paid into a Fidelity Bank account of Brietling Services, a company also established by the 1st accused person. At the request of the 1st accused person, the amount of GHS 35 million which was transferred into the account of Brietling Services was subsequently transferred to Capital Africa Group, a company owned by the 1st accused person”. “The total amount of GHS 130 million which was represented as initial capital of Sovereign Bank was eventually channelled by the 1st and 2nd accused persons into Capital Africa Group, the 1st accused person’s company, less bank charges. The monies transferred into Capital Africa Group was eventually dissipated by the 1st and 2nd accused persons”.

“Between June 2015 and October 2016” , the facts further stated that “the 1st accused person, with the support of the 3rd accused person, appropriated a total of GHS 27.5 million of the liquidity support which was conveyed in jute bags to the 1st accused person and purportedly used as payment for business promotion” . “In June 2017, in furtherance of the conversion of portions of the GHS 620 million liquidity support, the 1st accused person caused a sum of GHS 100 million to be paid into a Capital Bank account held by the Managing Director of the following three (3) companies; Maripoma Enterprise Limited, Hardwick Limited and Volta Impex Enterprise Limited opened purposely to receive the amount. The GHS 100 million was to be used by the Managing Director of the three companies ostensibly as payment for 30% shares in Capital Bank. As a cover-up of the conversion, the 1st accused person prevailed on the Managing Director of the companies to submit copies of Government Payment Certificates of the three (3) companies valued at GHS 135 million to be discounted to GHS 105 million by Capital Bank, to be used as collateral for the purported loan of GHS 100 million”.

“The 1st accused person then caused GHS 70 million out of the GHS 100 million that had been previously paid into the Managing Director’s account at Capital Bank, to be transferred to the 4th accused person’s account with Calbank Limited.

The 1st and 4th accused persons subsequently caused the amount of GHS 70 million in the Calbank account of the 4th accused person to be further transferred into a personal account of the 4th accused person purposely opened at Capital Bank to receive the amount.

Facts sum up as follows: “sometime in 2017 after Capital Bank had gone into receivership, the 4th accused person even though fully aware that Capital bank had gone into liquidation, attempted to withdraw the whole amount of GHS 70 million which had been lodged in her personal account with capital bank but was however prevented from doing so by the receiver”.

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