General News of Tue, 16 Oct 201838
uniBank takeover: Duffuor Jnr sues KPMG for deceit
Son of former Finance Minister, Dr Kwabena Duffuor has sued auditing firm KPMG and some of its staff for their involvement in the collapse of uniBank in August.
Dr Kwabena Duffuor II is accusing KPMG of deceit and deliberately misleading the Bank of Ghana and government into illegally collapsing the bank he had led as CEO.
Official court documents – a counter suit - sighted by Joy News names many of KPMG workers as defendants with substantial damages claim.
The BoG in August collapsed uniBank and four others – Beige Bank, Royal Bank, Sovereign Bank and the Construction Bank – and created the Consolidated Bank.
Prior to the collapse however, the BoG placed uniBank under KPMG’s administration in March. It presented adverse findings to the BoG after the bank was collapsed.
In its report, KPMG said based on a detailed review and validation of the financial condition of the bank, it was insolvent at the time of their appointment.
KPMG also found following its administration of the bank that serious corporate governance, compliance and management flaws, as well as unlawful transactions involving shareholders, related parties and connected parties.
Being a receiver, KPMG sued the founder of the uniBank, Dr Kwabena Duffuor and 16 others for the bank’s collapse.
The auditing firm is asking the High Court to hold Dr Duffuor and the defendants liable and be made to repay an amount of ¢5,712,623,145 owed the bank as all the 16 defendants are directors, shareholders and debtors of the defunct bank.
The defendants include Hoda Holdings Ltd, Hoda Properties, Alban Logistics, Starlife Assurance, Dr Kwabena Duffuor II, Boatemaa Kakra Duffuor-Nyarko and Nana Boakye Asafu-Adjaye.
But in a countersuit, also at the High Court, Dr Duffuor says KPMG and other agents of the BoG have misled the government of Ghana.
The suit says “challenges confronting uniBank which was no more than general economic challenges were attributable to some alleged incompetent management of the bank and lack of diligence when indeed creditable records available to relevant government agencies have been to the effect that the said challenges were substantially attributable to the government’s own indebtedness to uniBank and the global economic turbulence.”
Dr Duffor II is also baffled that KPMG’s official administrator Nii Amanor Dodoo upon whose authorisation the BoG revoked uniBank’s lincense has been appointed “the receiver” of the bank.
He is also surprised that Daniel Addo, a former senior partner with KPMG who participated in the discrediting of uniBank has now been appointed CEO of the newly created Consolidated Bank.
“Simon Dornoo, who has also benefited from the KPMG substantially discredited report as an appointed representative of the Official Administrator of uniBank “in receivership” was also at all material time a senior member of KPMG.
“Abeeku Nissi Diafo an employee of KPMG acting on the purported instructions of Nii Amanor Dodoo, Plaintiff herein, to send a notice of invitation on the letterhead of KPMG to the 8th Defendant herein to validate a so-called inventory which in any case was not attached to the notice of invitation,” the suit said.
KMPG deliberately and for its own self gain causing the long standing, enviable, validated liquidity position of uniBank contained in records adequately made available to KMPG to be impaired in violation of all well known principles, practices and custom of business of Banking, thus inordinately providing a tainted impetus compelling the Government of the Republic of Ghana to expropriate “the good assets” of uniBank and transferring same to the new public Bank contrary to all the well known relevant legal regime and structures, the suit added.
Dr Duffuor II maintains that had it not been for the misrepresentation and rent seeking behavior of KPMG, the BoG and government of Ghana would not have revoked the license of uniBank.
“…the Plaintiff herein the latter acting as a partner of KPMG who in concert with other agents of KPMG being partners or agents caused the government and the Bank of Ghana to take the legally unfounded actions that have led to the apparent collapse of uniBank, Ghana’s most successfully managed indigenous Bank until March 20, 2018 when KPMG took over.”
Dr Duffuor II who was CEO of uniBank until KPMG was appointed as administrators is seeking special damages in the loss of earnings “by reason of persons who would have done profitable business with the 8th, 10th and 14th Defendants now refusing to do so in view of the false publications sourced, inter alia to the discredited report of KPMG and the Plaintiff herein.”
He also wants domestic and international damages for causing it reputational and professional harm to his business through its misrepresentation and that “Defendants are persons incapable of running the business of banking and the financial sector as a whole.”
Dr Duffuor II also wants the court to grant it damages in the loss of prospective earning and international transactions which are the life blood of every practitioner of the business of banking.