Mess Caused By Bank Of Ghana To Atobiase Rural Bank

I would like to thank Ghanaweb for allowing me to express my concerns through this medium to the good men and women of Ghana about an issue that has been boggling my mind for months regarding the dealings of seemingly untouchable mighty Bank of Ghana with Adansi-Atobiase Area Rural Bank.

I refer to the Bank of Ghana’s announcement of May, 2008, in the Ghanaian Daily Graphic that by July 15, 2008 if no financial bailout is offered to the Atobiase Rural Bank it would close its doors to the public. However, I deem it necessary to hold The Bank of Ghana (BoG) responsible for the collapse of the Atobiase Rural Bank due to the following reasons:

1. The BoG took over the Atobiase Rural Bank in 2005, appointed its representatives and imposed an interim Board of Directors who were not shareholders of the Atobiase Rural Bank. Under normal circumstance Board of Directors would be selected from the pool of shareholders who are the owners of the Bank.

2. Prior to 2005 Atobiase Rural Bank was operating effectively, though with little financial issues under the existing Board of Directors selected from the pool of shareholders.

3. From 2005 to April 2008, the BoG’s interim Board of Directors (who were not shareholders of the bank) made operations and management decisions for the Atobiase Rural Bank and its various branches. Notably the Atobiase Rural Bank was temporary closed on April 2008.

4. In less than two years the BoG overseeing this interim Board of Directors hired new employees for the Atobiase Rural Bank without proper security checks. These employees stole over 1.08 billion cedis (108,000 New GH cedis) from the Atobiase Rural Bank. In addition, per the auditor’s report on February 22, 2008, within 14 months this interim board had mismanaged over 4.84 billion cedis (GH¢ 484,136). The above figure includes loans & overdraft activities amounting to GH¢ 294,563, staff cost of GH¢ 79,650, office equipment & renovation of agencies of GH¢ 28,960, administration and other expenses of GH¢ 80,963, susu overdrawn of GH¢ 100, 727 and the rest being fraudulent acts on the part of irresponsible staff the interim board of directors appointed by BoG, hired to operate the bank.

5. Under this interim Board of Directors millions of cedis of loans had been issued without proper security and collateral, making such loans irrecoverable.

6. This interim Board of Directors imposed on the Bank served a prolonged term; since they were not stakeholders or shareholders of the Bank, they did not have the will and empathy to make sound decisions to run the Bank efficiently – resulting in the collapse of the Bank because the actual shareholders were not motivated to give normal continuous support to the Bank.

7. According to the BoG’s own Rule 26 [Responsibility of the Board of Directors for sound Governance] SECTION F: CORPORATE GOVERNANCE); The Board of Directors of a licensed institution is wholly responsible for the sound and proper functioning of the institution and is accountable for the institution's activities and actions to its stakeholders viz. shareholders, creditors, customers and employees, and to the regulatory authorities.

8. By virtue of BoG’s own rule 26 referenced above, who must come with the financial assistance to prevent the closure of the Atobiase Bank? How would the actual shareholders of Atobiase Rural Bank be responsible for the decisions made by the BoG’s imposed interim Board of Directors which led to the current condition of the Atobiase Rural Bank?

9. The Bank of Ghana has failed to provide financial security and protection to the bank.

10. By applying the stipulations of item #7 above, the BoG is solely responsible for the collapse of the Atobiase Rural Bank and therefore has no justifications to seek the Bank’s closure, but should act in a way to restitute the bank.

11. Moreover, I have been trying to secure loans and grants from international organizations and some from private domain but the BoG failed to provide her part of contribution which are listed below:

i. The BoG was to approve a proposal I submitted to the Banking Supervision Department of BoG since June 19, 2008. There is no response whatsoever. This proposal was awaiting the approval of BoG for the World Bank and IFC to react in providing assistance. I called one Mr. Daniel K. Owusuh on July 16, 2008 and his response was that the BoG was not ready to offer such guarantee to any bank. Therefore the proposal would not be approved. ii. The BoG was to provide access to the bank facility at Atobiase in order to obtain copies of License of registration and commencement of business as supporting documents and proof for banking institution which would enable me secure a loan from the private sector. Also while working against a deadline of 15 July, 2008, the BoG had delayed this process since June 5, 2008 until now, there is no chance of access to the Bank facility. iii. How does the BoG want us to raise fund if after all the mess they have caused against the Atobiase Bank, they continue to put such impediments on the banks effort to secure funding?. I need someone from BoG to come out to explain this.

Though I was enstooled as the Chief of Adansi-Atobiase in May 5, 2005, but I know for fact that all along the Bank of Ghana has played both positive and negative roles for the bank for which the latter has boosted the presumptuous collapse of the Atobiase Area Rural Bank after 25 years of operation. The Atobiase Area Rural Bank Limited was incorporated as a public limited liability company on 11th September 1983. The Bank was registered under the Companies Code 1963, Act 179 as a public limited liability company and licensed by the Bank of Ghana under the then Banking Law, 1983 (PNDCL 225) as repealed by the Banking Act 2004, (Act 673).

The Atobiase Area Rural Bank is located in the Ashanti region, 58 miles south from Kumasi on the Kumasi to Cape Coast road, and 20 miles south of Obuasi, the Gold mining city. It was founded about 25 years ago with the sole mission to provide financial services to a large numbers of poor, many of whom are illiterate or live in remote, rural areas surrounding Atobiase. Over the years the rural folks have substantially benefited from the bank through loan lending, “susu” operative, cashing teachers and farmers cocoa checks, and agricultural extensions initiatives. The rural bank has grown from one to six different branches three of which are located in Kumasi, and one at each of the following locations: Obuasi, New Edubiase, and Kuhyia with its headquarters in Adansi-Atobiase. The town also runs a police station as the only source of security to the Rural Bank. The bank has currently 63 employees and focused on offering financial services in the form of making capital loans to the poor that can make difference for several thousands of families. We support efforts such as improved business lending, savings, checking, fixed deposits, payment of cocoa farmers’ checks, workers salaries (teachers) and “Susu” products. This has been our major goal in 25 years of operation.

Since 2005 the Bank has been managed at the high-level by the BoG management team who autonomously imposed rules and regulations on the entire Atobiase Bank thereby reinforcing their administration in the affairs of the Bank, which I thought initially, wasn’t a bad idea given the stature of BoG in the country. But it has rather turned out to be a great mischievous. The latter actions on the part of the BoG had been intensified since late 2005 when one Mr. Appiah Adjei Kusi Mensah acting in his capacity as BoG employee and representative, dissolved the already well operational Board of Directors of the Bank, who were chosen by the bank shareholders themselves. This same Appiah-Adjei instituted an interim board of directors who were not shareholders and therefore had no lineage to the bank affairs. These persons were in the name of Mr. Amponsah Mensah – chairman, Mr. Atiamo- Vice Chairman and Mr. Adusei Opoku. In the banking system how would one weigh the difference between highly educated board of directors but not shareholders of a bank to take positions at the helm of the affairs of a bank, as opposed to less educated board of directors but shareholders who have been selected by the entire shareholders. These persons imposed on the bank, were supposed to be the interim management for six month but stayed in position for over two years till the total collapse of the bank.

The BoG with these three member board of directors not only dissolved the existing board of directors but also fired six permanent employees who were then placed under administrative leave with pay for over a period of five months pending some dubious investigations which ended in chaos, and so they were obliged to recall them to resume their normal duty. During this time the six employees who were hired in their place were never fired so by recalling those who were presumptuously fired led to over-employment. This is a pure mismanagement causing substantial financial loss to the Bank.

I iterate that the BoG’s appointed interim Board of Directors, have willfully caused a substantial financial loss of over GH¢ 500,000 to the Atobiase Area Rural Bank. Further to this, making things worst this interim board of directors employed such bank employees as managers, accounting clerks without any specific security checks. Under the interim board administration imposed on the Bank by the Bank of Ghana with the complicity of Mr. Appiah-Adjei, they hired one Mr. Frank Bonsu to work in the Obuasi Branch of the Bank who stole 280 million Cedis (GH¢ 28,000). They hired another person by the name of Nimako who started overcharging fictitious renovation projects in three of the branches of the bank and embezzled over 90 million cedis (GH¢ 9,279). At the same time Mr. Samuel Ahaja stole 200 million cedis (GH¢ 20,000). Under the same interim one Mr. Nikabo took away series of monies in the tune of 20 millions, of which only 4.5 million (GH¢ 450) have not been yet refunded. Agnes Kuffour embezzled about 70 million (GH¢ 7,000) check issued by one manager Charles Sackey.

Some susu collectors have embezzled over 120 million (GH¢ 12,000), which they haven’t been able to account for. In Suame branch, in Kumasi, one manager by the name of Korsa has stolen 200 million (GH¢ 20,000) and which is still have not been accounted for. This interim administration have caused a great deal of a mess and even brought outside employees like Mr. Darko, to come to work for the Bank. This Mr. Darko had been issued a check payment order of 46 million (GH¢ 4,600) by the same Mr. Frank Bonsu to purchase a car in Oda.

During Mr. Stephen Kwanin and Mr. Yiadom’s time 90 million (GH¢ 9,000) check was forged with the signature of Mrs. Gloria Asiedu, which the Manager Asamoah Kesse fled with, and now pending an investigation.

In conclusion, by virtue of the analysis given above and, in accordance with BoG’s own regulations rule 26 of Responsibility of the Board of Directors for sound Governance, and since the BoG brought in their own Board of Directors to manage the affairs of the Atobiase Rural Bank, the BoG is solely responsible for collapse of the bank and therefore has no justification to close down the Atobiase Rural Bank. I essentially, in my capacity as the Chief of the Atobiase town, thereby use these media to urge the BoG to resolve and clean up their own mess in order to restitute the Atobiase Bank.

Nana Taaka Siaw II, Adansi-Atobiasehene (Bright Siaw Afriyie), bsiawa@aol.com