Deputy AG runs from his position on revocation of UniBank license

A Deputy Attorney-General and Minister for Justice, Godfred Dame, has fled from his own preliminary written objection to the Finance Minister on the revocation of the license of uniBank. The change in position, shows government trying to whitewash a wrong that had been done in the Banking Sector clean up.

It emerged that, the Attorney-General’s Department in its preliminary observations upon a request for comments on the matter, advised against the revocation of the bank’s license, suggesting that it will be illegal to do so, but the Attorney-General’s position was, however, not adhered to by the Finance Minister.

But, Godfred Dame in what appears to be lack of principles during an interview with Citi News, said although the Attorney-General’s official position on the matter was different, indicating that there was nothing wrong with revoking the defunct bank’s license.

Mr Dame on Friday, said the initial letter to the Finance Minister on the subject was only a first step in the process and his office’s official position on the case was what it argued in court.

“This letter only constituted a first opinioned step that we take in the matter. It is no different from what pertains in other cases that we handle on behalf of the Ministries, Departments and Agencies of State…I wonder how a person could ignore all the official positions taken by the AG on the matter and conclusions made by the court, as well as the arbitrator,” he said.

A letter signed by Godfred Dame indicated that the entire process leading to the appointment of KPMG as an official Receiver of uniBank was unlawful and illegal.

“It is beyond dispute that the official administration uniBank was placed under, terminated with the revocation of the license of that bank and the appointment of a Receiver for selected assets and liabilities. It seems that these actions cannot be supported in terms of section 122 (2) of Act 930. As observed above, section 122 (2) stipulates circumstances under which official administration may validly terminate at an earlier time, including a situation necessitating a revocation of the license of the bank under section 16 or liquidation of the bank in accordance with sections 123 to 139 of Act 930.”

“Thus based on the clear language of section 12 (2), any revocation of a license pursuant to a recommendation of the official administrator under section 122, may be done in accordance with section 16 of Act 930. It is undeniable that a revocation of the license of uniBank was not based on section 16 of Act 930, because this would have required compliance with provisions of that section which further stipulates the provision of notice in writing to the bank, specification of the proposed action and the grant of at least thirty (30) days opportunity to the bank to make written presentation. It, therefore, cannot be asserted that the termination of official administration was effected in accordance with section 122 of Act 930,” the letter read.

The 11-page leaked letter dated January 25, 2019, from Attorney General, indicated that the Finance Ministry and the Bank of Ghana (BoG), were complicit in inexplicably hastening the revocation of the license of the embattled bank.

For instance, on June 22, 2018, the official administrator appointed to look into the difficulties faced by UniBank, KPMG wrote to the Finance Ministry that the government was owing UniBank by some GHC 870 million, of which the Finance Minister responded on July 12, 2018, that it was sorting out the debt with the BoG.

About three weeks after this assurance by the Finance Minister, the BoG on August 1, 2018, wrote strangely to UniBank revoking its operational license.

Additionally, the BoG questionably handed the assets of UniBank to the newly formed Consolidated Bank Ghana (CBG), even though the CBG, did not yet have an official certificate to commence business in Ghana.

“We note that CBG was incorporated on 1st August 2018 and a certificate to commence business was issued to that bank on 2nd August 2018. We also observe that selected assets and liabilities of the 5 banks were transferred to [CBG] on 1st August, 2018 via a Purchase and Assumption transaction, before the grant of a certificate to commence a business,” stated the letter from the AG’s office.

It warned that the transfer of the assets of UniBank and five other liquidated banks to CBG on that day, constituted a criminal offence as contained in Ghana’s Company Act: “ Section 27 of the Companies Act, 1963 (Act 179) prohibits a company incorporated in Ghana from transacting a business until it has satisfied the provisions therein and has been issued with a certificate to commence business. A violation of this provision constitutes a criminal offence for which the company and every officer of the company shall suffer penalty…”

“From the decision taken by the BoG on 1st August 2018, it is apparent that the mandatory duties of a receiver, such as publication and registration of notice of receivership and taking of an inventory of the assets and property of uniBank and publication of same in two daily newspapers of national circulation were not done before the receiver entered into a Purchase and Assumption transaction with CBG”

Such a confirmation would also lend light to the allegation by owners of the defunct Capital Bank that Mr Ofori- Atta, may have masterminded the takeover of Capital Bank as a matter of personal vendetta.

According to the owners of Capital Bank, Ofori-Atta, had prior to the NPP coming into office, approached them and propositioned them with a buyout, but they had refused.

According to the letter, the BoG and its receivers circumvented several procedures in their bid to close down UniBank, including sections in the banking Act 930 that required that the receiver (KPMG) prepares a report of liquidation of Unibank that should contain the number of assets likely to be realised in a liquidation of the bank and a proposal to make the bank carry out corrective measures by either capital increase or minimise disruption to depositors funds.

That same letter had been copied to the Governor of the Bank of Ghana, Dr. Ernest Addison, who led the Government’s onslaught against banks that the government said had become insolvent due to mismanagement.

Some eight indigenous banks collapsed as a result of this alleged banking sector clean-up. The first two, UT Bank and Capital Bank, were taken over by Ghana Commercial Bank in August 2017.

The Royal Bank, Beige Bank, Sovereign Bank, Construction Bank and UniBank, were consolidated a year later into the CBG in August 2018.

The reason for the revocation of its license given by the government was that UniBank and the other banks had become insolvent and could not come up with Ghc400 million minimum capital requirement.

However, as at the time of this revocation, the same government owed UniBank some Ghc1.3billion.

But Godfred Dame, insisted that, persons circulating the letter and suggesting that the Attorney-General was against the revocation of uniBank’s license were only being mischievous.

“It is pure mischief and very hopeless mischief and has to be dismissed,” he said.