Customers chase ASN Financial Services Limited for cash

Some disgruntled customers of ASN Financial Services Limited (ASN-FSL), a licenced Finance House, are unable to access their investments with the indigenous institution – a situation further compounded by lack of information from the institution or the central bank.

“We had a meeting in March last year, when they [ASN-FSL] promised paying us this year. So far, I have been to their offices but they don’t tell us anything. We can’t even see and talk to any of the managers. It’s just the receptionists we meet, and they just tell us stories all the time.

“In December, I needed money badly to take care of some pressing needs; but I couldn’t access some of my GH?18,000 with the company,” Auntie Iris, a customer of the company, told the B&FT.

Dr. Kobby Mensah, a marketing lecturer at the University of Ghana Business School and a customer of ASN-FSL, is also struggling to recoup his GH¢15,000 invested in the company’s real-estate product.

He tells B&FT that: “I am still waiting to receive my cash. I have made attempts to speak with managers to no avail. We heard last year that there was an investor, but we do not know what has become of that as the situation is the same. The central bank must come in to ensure the proper thing is done”.

Other customers of the beleaguered institution have also informed B&FT about the difficulty in retrieving their cash.

B&FT checks with the Banking Supervision Department of Bank of Ghana on Wednesday, March 21, 2018 about the status of the company’s turnaround strategy submitted to the central bank, the news of an investor who was expected last year, and what is the BoG doing to resolve the issues with ASN-FSL are all questions yet to be answered.

There are 35 universal banks in the country and more than 429 licenced microfinance institutions offering various financial products to the public.

There are about 70 Non-Bank Financial Institutions (NBFs). These are made up of 24 Finance Houses; 2 remittance companies; 3 Credit Reference Bureaus; 37 Savings and Loans companies; 2 leasing companies; and 3 finance and leasing companies.

The ASN-FSL challenges

ASN Financial Services Limited, a licenced Finance House, has been experiencing challenges in its operations over the past few years.

The company in May 2017 announced that it has secured a strategic investor who is expected to invest over GH?100million into the company.

Directors of the company in May 2017 confirmed to B&FT they had submitted to the central bank their turnaround strategy that details, among others, the composition of a new board, the new shareholding structure and other concrete measures being adopted by the company.

Under the turnaround strategy presented to the BoG last year – though it’s unknown whether it was approved, the unnamed strategic investor was expected to hold a majority stake in the company with Mr. Johannes A. Okutu, the current Chief Executive Officer, as minority shareholder. The strategic investor was expected to invest up to GH?100million in the company.

BoG acts to sanitise industry

The industry regulator, the Bank of Ghana (BoG), has over the past eight months sought to sanitise the industry – though much remains to be done.

On August 14, 2017, the BoG approved a Purchase and Assumption transaction with GCB Bank Ltd. that transfers all deposits and selected assets of UT Bank Ltd. and Capital Bank Ltd. to GCB Bank Ltd. It also revoked the Licences of UT Bank Ltd. and Capital Bank Ltd.

According to the central bank, the action became necessary due to severe impairment of the two institutions’ capital.

On March 20, 2018, the BoG also announced that it has placed uniBank under administration for a minimum of six months to save it from imminent collapse – in line with powers conferred on it under Sections 107 and 108 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). Accounting firm KPMG was appointed as Official Administrator for the bank.

“Section 107 of Act 930 empowers the Bank of Ghana to appoint an Official Administrator to take official control of a bank when its capital adequacy ratio (CAR) has fallen below 50% of the required minimum of 10% (i.e. below 5%),” Dr. Ernest Kwamina Yedu Addison, said the BoG Governor.

Analysts criticise BoG for lax supervision role

Emmanuel Akrong, a credit consultant, believes that the BoG, auditors of uniBank and Parliament have not been exacting enough.

“I will put this squarely at the doorsteps of Parliament. We have three branches of government, and BoG is more or less part of the Executive branch. We have the Legislative branch, which is supposed to keep an oversight on the Bank of Ghana.

“In developed countries, some of these CEO would be sitting in front of Parliament answering questions and there would have been a select Committee of Parliament investigating this,” he said.

Cassiel Ato Forson, a former Deputy Finance Minister and a Ranking Member of Parliament’s Finance Committee told the B&FT that: “Parliament will summon the Finance Minister and BoG Governor to the House before it rises, to seek further clarification and detailed information on why uniBank is up for administration”.