Beige Bank case: It's quite ridiculous to say funds moved from customers accounts without their consent – Witness

Mr. Seth Adu-Afram, the eighth Defence Witness in the ongoing Beige Bank trial, has stated, "It is just impossible to move funds from a customer's account without their consent."

He remarked, "That is quite ridiculous because it cannot happen in banking."

"...What I am here to testify is in relation to the fact that funds moved from customers' accounts without their consent, and that is quite ridiculous because it cannot happen in banking. It is just impossible," he told the Court under cross-examination by the prosecution led by Hilda Craig, a Principal State Attorney, on May 3.

Mr. Afram, a former Branch Chief Executive of the UTC and Kwashieman branches at two separate periods of the Beige Bank, had told the Court in his evidence-in-chief that, "none of the 10,000-plus customers is on record as having rejected the investment certificate issued to them following the purported unauthorized movement of funds from their accounts, which raises significant doubt about the substance of the allegation."

He also stated that the allegations are "untrue" because, as branch executives and relationship officers, they had aligned these customers.

It was the case of the witness that allegations of funds being moved from these customers' accounts at the instructions of the accused, without the consent of the affected customers, are untrue.

Mr. Afram also explained that none of the said customers "is on record as having lodged a formal complaint at the time the funds were moved from their accounts, which raises significant doubt about the substance of the allegation."

The prosecution had claimed that the Chief Executive Officer (CEO) of the defunct bank, Michael Nyinaku, siphoned customers' funds without their knowledge.

However, Mr. Seth Adu-Afram, who, like previous Defence Witnesses, said that the allegations are "untrue" because, as branch executives and relationship officers, they had aligned these customers.

Mr. Nyinaku, the founder and CEO of the defunct bank, has been charged with allegedly stealing GH¢2.1 billion of depositors' money from the bank.

He has since pleaded not guilty to 43 charges, including stealing, fraudulent breach of trust, and money laundering, and has been granted bail.

Facing cross-examination from Ms. Hilda Craig, a Principal State Attorney, Mr. Afram, who is also a banker and a financial analyst by profession, said the customers were engaged and that none of these customers is on record as having rejected the investment certificate issued to them.

The Principal State Attorney (PSA), while making reference to the Witness's statement, specifically to paragraph 29, said the Witness claimed no money could move from a customer's account without the consent or the agreement of the customer in the form of signing the Investment Advice Form.

In his response, Mr. Afram said, "That is not entirely correct."

He added, "I said that no investment can be established without a customer agreeing or consenting to it. To explain further, it is practically impossible to move funds from any customer account, be it current, savings, or even an investment account. You can only do that with an express instruction from the customer. That is the only way funds can move from a customer's account because the account is operated with the customer's mandate at the time of opening the account, so it is just impossible to do that without the customer's consent."

The PSA then asked about the National Blood Service (NBS), "You have not brought any document at all to this court to show that they agreed for the account to be debited."

"Not entirely correct because investment advice and those documents are banking records that are not supposed to be kept outside, and as I have already stated, I resigned a few months after receivership and so I do not have access to those documents. What I know is that I met with them a couple of times, and they agreed that an investment should be established for them, and subsequently, a certificate was issued, which I personally delivered to them, and they had no objection to the certificate," the Witness responded.

Ms. Hilda Craig said, "I am putting it to you that all that you have just narrated are just afterthoughts because if those banking records really existed, you would have brought them before this court just as you have done with other documents."

The Witness said, "I do not know exactly what you are referring to because when they wanted to establish the fixed deposits, after engaging them and we agreed on the establishment, that is the amount and other details, the next thing was for the customer to sign the advice.

"Once the advice is signed, that represents the customer's consent that the fixed deposits be established on their behalf. Once I receive that, we come back to the branch to process it.

"To process, what I mean is to complete the advice after they have signed, and it is forwarded to the appropriate department of the bank, specifically the Operations Department. They are responsible for establishing the fixed deposits once the advice has been transmitted to them. I then wait until the certificate is ready and dispatched to the branch so I can deliver the same to the customer.

Find below the full cross-examination of DW8 by Ms. Hilda Craig

CROSS-EXAMINATION OF DW9 BY MS. HILDA CRAIG

Q: You are aware that the accused person was the CEO of the Beige Bank?

A: Yes my lady.

Q: You are also aware that this accused person was also the CEO of Beige Group?

A: Yes my lady

Q: And you are again aware that BCAM was a subsidiary of the Beige Group.

A: Yes, my lady it is a sister company that I stated in my witness statement.

Q: BCAM as a subsidiary of the Beige Group was a separate legal person, are you aware of that?

A: Yes my lady.

Q: According to your paragraph 29 of your witness statement, no money can move from a customer’s account without the consent or the agreement of the customer in the form of signing the Investment Advice Form (IAF)?

A: That is not entirely correct. I said that no investment can be established without a customer agreeing or consenting to it. To explain further, it is practically impossible to move funds from any customer account being it current, savings or even an investment account. You can only do that with an express instruction from the customer. That is only way funds can move from a customer’s account because the account is operated with the customer’s mandate at the time of the opening of the account so it is just impossible to do that without the customer’s consent.

Q: In respect of the National Blood Service (NBS), you have not brought any document at all to this court to show that they agreed for the account to be debited, is that correct?

A: Not entirely correct because investments advice and those documents are banking records that are not supposed to be kept outside and as I have already stated, I resigned few months after receivership and so I do not have access to those documents. What I know is that, I met them a couple of time and they agreed that an investment should be established for them and subsequently a certificate was issued which I personally delivered to them and they had no objection to the certificate.

Q: I am putting it to you that all that you have just narrated are just afterthoughts because if those banking records really existed, you would have brought them before this court just as you have done with other documents?

A: I do not know exactly what you are referring to because when they wanted to establish the fixed deposits, after engaging them and we agreed on the establishment that is the amount and other details, the next thing was the customer was to sign in the advice. Once the advice is signed, that represents the customer’s consent that, the fixed deposits be established on their behalf. Once I receive that, we come back to the branch to process it. To process, what I mean is to complete the advice after they have signed and it is forwarded to the appropriate department of the bank specifically the Operations Department. They were responsible for establishing the fixed deposits once the advice had been transmitted to them. I then wait until the certificate is ready and dispatched to the branch so I can deliver same to the customer.

Q: Just as you have not brought any document in respect of the NBS, the same way the over 200 customers that you have listed in paragraph 62 of your witness statement, you do not have any document showing their consent to the movement of their monies to BCAM?

A: I have already indicated that all the documents you are talking about are internal banking documents. These documents are kept in the branch or in the bank so there is no way I would have access to those information. Again, I have resigned and I am not with the bank so being an outside person, I do not know how to get those documents but I can say on the record that all these over 10,000 customers were issued with an investment certificate so I think the court can call them.

Q: These 10,000 customers you talk about were all not in your branch?

A: The ones I have in my witness statement were the customers of the UTC branch or Kwashieman branch.

Q: The customers whose investments were transferred to BCAM placed these investments in the Beige Bank and not BCAM.

A: No, I disagree because as a sister company, after we had become a universal bank and could not offer the rate that the savings and loans company was offering, instead of losing these customers entirely to our competitors, we were advised to sell for those who say they cannot go with the bank’s rate to BCAM so we sold BCAM to them because then, we were selling BCAM’s product that is the fixed deposits in the bank. This is not a strange practice. For instance, in Ecobank, it sells EDC products in Ecobank branches. EDC do not have branches all over the country, but through Ecobank, they are able to sell their investment products so similarly, we were advised to sell our sister company to our customers who would not accept the new rate of the bank. So when a customer accepts to make an investment with BCAM, the customer becomes a fixed deposit customer of BCAM but the customer is still a current account holder of the bank so if an advice is completed and sent and the investment is put at BCAM, the customer becomes a fixed deposit customer of BCAM but like I said earlier, still a current holder of the Bank which is the Beige Bank.

Q: In your own example which is the EDC example with Ecobank, Ecobank selling EDC products will show clearly on the face of the document that they are selling EDC products, I am putting that to you?

A: Yes, that could be true but I cannot speak to the specifics but what I am aware of in the case of the Beige Bank and BCAM is that at a point in time, the bank after we transitioned from the Savings and Loans to a universal bank went through a series of rebranding so to say that it is specifically stated that Ecobank or EDC is not different in our case. Customers whose investments were with BCAM knew exactly where their investments were. They were aware and for the period I was a Branch Manager, there was not a single complaint that a customer had issues with what is on the certificate or anything of the sort.

Q: I am putting it to you that on the face of the documents, BCAM was not written on any of the documents that were presented to the customers to show that the customer was dealing with BCAM and not the Bank.

A: That I should not think it should be a problem.

By Court: Answer the question. Repeat the question for him to answer.

Q: I am putting it to you that on the face of the documents, BCAM was not written on any of the documents that were presented to the customers to show that the customer was dealing with BCAM and not the Bank.

A: That is correct but it was not a problem because before a certificate is issued, first of all I have already established that all the customers I dealt with including the ones we have here, knew vividly that their investments were with BCAM. As a matter of rebranding, if any customer walks into any of our offices, if it was, it is just a customer service issue of the customer service advisor taking the customer’s certificate and can clearly tell the customer where the customer’s investments are so the customers were aware where their investments were so that is why I said that should not be a problem.

Q: There was no separate agreement between the Beige Bank and BCAM in respect of the investments that were moved from the Bank to BCAM?

A: What I can say to that is, that would definitely be for any institution to be at the management level.

Q: Was there an agreement or not?

A: I was a Branch Manager and some decisions were not at my level. Some decisions were taken at the management level but once it is communicated to our level which is the branch level from this date, you can start selling BCAM’s products or investment in the bank premises. It definitely means that there was an agreement because both institutions are highly regulated and so nobody can just sit down and begin to do things based on their own discretion so I think there was an agreement.

Q: You are aware that CBG paid all the affected customers with funds provided by the government?

A: I am not aware.

Q: You were still with the bank even after the receivership?

A: Yes but I resigned just a month after receivership.

Q: Within that one month that you stayed on when the receivership came, you never raised any issue with CBG that some of your customers at your branch had investments with BCAM and not the bank so they should not be paid whatever investments they were asking for?

A: As much as I am aware, nothing of the sort came up that customers had issues with their investments and who should be paying for and to go back to her earlier point as to government paying for investments for customers, I am of the view that it is normal in the sense that, on the day of receivership, we were told the old bank ceased to exist and that the CBG was now in charge so if payments were to be paid even to customers of BCAM. I am sure it would have just been a matter of reconciliation by the new bank and where BCAM this matter their investments were but the issue we have here and which I am here to speak to is that, while I remained a Branch Manager, there is not a single customer that had an issue of their investments maturing with them struggling to get paid or not being paid. If there was such a complaint after receivership, then I am sure the investments might not have matured. But even that, I think it is another case. What I am here to testify is in relation to the fact that funds moved from the customer’s account without their consent and that is quite ridiculous because it cannot happen in banking. It is just impossible.

Q: Were you a staff of BCAM?

A: No, please

Q: BCAM had their own staff?

A: Yes, please

Q: They had their own offices?

A: Yes, please.

Q: And yet you were the one who was issuing certificates on behalf of BCAM to customers?

A: That is not true and I want to explain that. I stated earlier that when a customer comes to the branch, my business per the bank’s processes and procedures, after I have engaged them and they agree to have an investment with BCAM, I complete an Investment Advice Form (IAF). Once that is done, it is forwarded to the appropriate department and that is a back-office business so once I get the customer’s consent as a form of advice, my work at the branch is done. I forward it to the appropriate department and they work on it a certificate is then issued from BCAM and I deliver the same to the customer. Let us not forget that the customer’s first point of contact is the branch so it is just appropriate that they pick their certificates from the branch.

Q: I am putting it to you that your customers from your branch were misled to believe that their investments were with the bank when in actual fact they were moved to BCAM without their knowledge.

A: That is not true and can never be true.

Q: I am further putting it to you that because of this deceit, the certificates that were issued to the customers had only “Beige” written on them which was to mislead the customers into believing that they were dealing with the bank.

A: I disagree and I can explain. As I indicated earlier, the Bank from being a Savings and Loans and becoming a bank had gone through a series of rebranding. At a point in time, Beige was branded as a one-stop financial services provider so to have “Beige” on a certificate, I believe was not intended to deceive customers and I can add that, all other details that were on the new template remained the same so the template alone could not have replaced the processes, the engagements and making the customers aware of the status of their investments and where they were. To the best of my knowledge, there was no deceit but just a matter of rebranding.

Q: I am putting it to you that in furtherance of this deceit, even the signatures on the certificates had no names to them as to who signed these documents, nobody can tell.

Witness: My lady I want to have Exhibit 111 to answer the question

A: Yes, it is the case but per bank processes and procedures, not anyone at all can get up to sign an investment certificate for the certificate I am holding, there is clearly a signature of the Managing Director and that can be traced with a person to any financial institution. I knew the Managing Director of BCAM and I recognized the signature and I can trace it to Mr. Thomas Esso.

MS. CRAIG: My lady that will be all for the witness.

END OF CROSS-EXAMINATION

By Court: Any re-examination.

Mr. Ampiaw: My lady there will be no re-examination.

By Court: DW9 is hereby discharged.