Banking clean-up: A-G's criminal proceedings against UT Bank shareholders, others to continue in December

Criminal proceedings initiated by the Attorney-General against certain shareholders, former directors and former employees of defunct UT Bank Limited will continue in mid-December this year.

GhanaWeb Business understands that the proceedings will also impact former officials of the Bank of Ghana.

The charge sheet filed at the Accra High Court on February 5, 2020, named as accused persons Dr. Johnson Asiama; a former 2nd Deputy Governor of BoG, Raymond Amanfu; a former Head of the Banking Supervision Division (BSD) of BoG, Catherine Johnson; Head of Treasury of the UT Bank.

Others are Mr. Prince Kofi Amoabeng, a former Chief Executive Officer of UT Bank, Robert Kwesi Armah; General Manager of Corporate Banking of UT Bank and UT Holdings; the parent company of UT Bank.

The trial judge is His Lordship Justice Bright Mensah, a Justice of the Court of Appeal sitting as an additional High Court judge.

So far, Dr. Asiama and Mr. Amanfu have been charged with willfully causing financial loss to the state, while Mr. Kofi Amoabeng and the other accused persons have been charged with various offenses such as dishonest appropriation of US$7 million and other deposits of customers, fraudulent breach of trust among other charges.

The state prosecution has since called the Receiver of UT Bank (in Receivership), Eric Nana Nipah, Registrar of the High Court (Commercial Division), Mr. Stephen Afotey and former CEO of UT Bank to testify on its behalf.

Eric Nana Nipah who is the first Prosecution Witness in his testimony told the Court that various investments placed by various companies such as, SSNIT SOS Fund, Forestry Commission, ECG Staff Fund, WAICA-Re and the National Communications Authority with UT Bank were moved out to UT Holdings without proper authorization.

He earlier testified that UT Holdings is not licensed to engage in such investment activities. The total amounts invested with UT Bank but transferred to UT Holdings without proper authorization is said to be GH¢51,334,387.08 and USD$8,799,917.

The second Prosecution Witness, Mr. Stephen Afotey, testified that an amount of US$7 million was deposited with UT Bank on the instructions of the Court.

This amount, he explained could not be traced when UT Bank was taken over by GCB Bank.

In November 2022, the Court heard the testimony of the third Prosecution Witness, Mr. Stephen Antwi-Assimeng who was serving as Chief Executive Officer of UT Bank at the time bank’s license was revoked.

The former CEO testified that UT Bank was already on liquidity support from BoG at the time he joined the bank. He intimated that UT Bank relied heavily on borrowing from BoG to deal with its liquidity challenges.

In his testimony, Antwi-Assimeng further indicated that UT Bank established letters of credit in the total sum of GH¢141 million, for some customers of the bank and added that these letters of credit were maturing in May and July of 2016.

He further informed the Court that the customers did not provide funds for the Letters of Credit and neither did UT Bank have liquidity on maturity.

Testifying further, Mr. Antwi-Assimeng stated that they had situations where a number of international lenders were calling in their loans because UT Bank had defaulted while some of the loans had reached maturity levels.

He also told the Court that UT Bank was experiencing an average of GH¢40 million loss of customer deposits, one of the bank’s key sources of liquidity. This, according to him, resulted in an acute liquidity shortage with UT Bank forced to pay higher interest rates to attract new depositors.

Proceeding further, Mr. Antwi-Assimeng informed the Court that UT Bank, on application to BoG, received liquidity support of GH¢460 million with the instruction not to use any part of the additional liquidity support for unapproved purposes.

He also told the Court that UT bank applied to BoG for unsecured liquidity support of GH¢30 million due to a lack of adequate securities to provide collateral for this facility.

Meanwhile, the matter has been adjourned for further hearing in mid-December 2022.

MA/FNOQ