GCB Bank deceiving the public – Adongo

Member of Parliament (MP) for Bolgatanga Central constituency, Isaac Adongo, has criticized GCB Bank of misleading the public and refusing to publish its audited financial statement.

“Rather than publish the full audited Financial Statement and Annual Report as is required of the bank by law, GCB Bank has rushed to publish a ‘Condensed Consolidated and Separate Financial Statements’.

“Sadly, the bank is using this Condensed Consolidated and Separate Financial Statements to mislead and deceive the unsuspecting public as its Audited Financial Statement and Annual Report,” he lamented in a statement released on Sunday 3 June, 2018

He pointed out that the action of GCB Bank “makes it impossible for any analyst to determine the true state of the bank to be able to make informed decisions”.

He was worried that the conduct of GCB Bank “has the potential to create and fuel further systemic risks, given its size and benchmark position both in the banking sector and the capital market”.

Below is the full statement:

GCB BANK, STOP THE DECEPTION AND PUBLISH YOUR AUDITED FINANCIAL STATEMENTS AND ANNUAL REPORT

I have reviewed the purported Audited Accounts of GCB Bank published in some newspapers and on the bank’s website and note with grave concern the height of deception and misleading conduct of the bank.

Rather than publish the full Audited Financial Statement and Annual Report as is required of the bank by law, GCB Bank has rushed to publish a "Condensed Consolidated and Separate Financial Statements." Sadly, the bank is using this Condensed Consolidated and Separate Financial Statements to mislead and deceive the unsuspecting public as its Audited Financial Statement and Annual Report.

For the avoidance of doubt, the published Accounts of the GCB Bank suffer from non-compliance with the following Regulatory Requirements:

1. Full disclosures as required by the International Financial Reporting Standards (IFRS),

2. Companies Code, Act 179 and

3. Banks and Specialised Deposit-Taking Institutions Act, 2016, Act 930.

It is instructive to note that the auditor of GCB Bank, KPMG, duly acknowledged this in plain terms when they stated that: “The Condensed Consolidated and Separate Financial Statement do not contain all the disclosures required by the International Financial Reporting Standards and in the manner required by the Companies Act 1963 (Act 179) and the Banks and Specialised Deposits-Taking Institutions Act 2016 (Act 930) applied in the auditing of the preparation of the audited Condensed Consolidated and Separate Financial Statement of GCB Bank. Reading the Condensed Consolidated and Separate Financial Statement and our report thereon, therefore, is not a substitute for reading the audited consolidated and separate financial statement and our report thereon.”

What this basically means is the audit firm has qualified the so called consolidated and separate financial statement published May 30 and the general public cannot rely on it due to the lack of material facts in the preparation process.

Without wanting to go into the basics of qualifying an audit report, let met state that by publishing the so called Condensed Consolidated and Separate Financial Statements, GCB Bank makes it impossible for any analyst to determine the true state of the bank to be able to make informed decisions.

GCB Bank by this conduct has not kept its promise to the people of Ghana in the letter issued to the public to cure their breach of regulatory obligations by 31st May 2018.

It is strange that the Bank claims to have deposited a copy of its Audited Accounts at its head office for interested parties to troop there to inspect them.

How can you expect investors, customers and other stakeholders spread across the world to come to your office to inspect your Audited Accounts when, in the past you had always published them on the website? This strange act of the bank begs the question what is the GCB hiding from the public?

Coming on the heels of the purchase and assumption (P&A) agreement between GCB Bank and Bank of Ghana with respect to UT and Capital banks, one is curious to ask if GCB is concealing whatever poison it might have swallowed from those two toxic assets by refusing to publish the Audited Financial Statement and Annual Report, which would have given a complete picture of the state of affairs of the bank before and after the transaction.

As an interested party in the affairs of GCB Bank, I urge the Bank to immediately publish its Audited Accounts for 2017 without delay to avoid further speculations and anxiety amongst its stakeholders and in particular, the banking industry. This is because, their conduct has the potential to create and fuel further systemic risks, given its size and benchmark position both in the banking sector and the capital market.

It is instructive to note that the so called Audited Accounts have already formed the bases of media reports and commentary. This is neither right nor fair to the public and the media, to the extent that the report on which public commentary is being made does not meet the Standards required of GCB Bank.

This kind of discussions which is clearly devoid of the required full disclosures and the compliant Audited Financial Statements is not right and will further endanger the Bank's reputation.

It is my expectation that GCB Bank will publish the full Audited Accounts and Annual Report without further delay.

While I demand this of GCB Bank, let me also state that when one sees an entity in a regulated industry conduct itself in this manner, one can only say that it is perhaps because the regulator, in this case, the Bank of Ghana, itself has equally been non-compliant.

If today, almost halfway into 2018, you visit the BoG's website, it will be evidently clear that 2017 Audited Accounts have not been published. What we have there is the 2016 Financials Bank of Ghana and GCB Bank must, therefore, endeavor to be good corporate citizens by staying compliant.

Hon Isaac Adongo

Member of Parliament

Bolgatanga Central