The Founder of International Central Gospel Church (ICGC), Pastor Mensa Otabil, and 15 other directors of the defunct Capital Bank have been sued for mismanagement and breach of banking regulations which led to the collapse of the bank.
The suit, filed by Vish Ashiagbor and Eric Nana Nipah, joint receivers of the bank, faulted Otabil, other shareholders of the bank, as well as its Founder, William Ato Essien, for making the bank to lose a whopping GH¢748.251 million.
The directors and shareholders have been accused of illegally approving loans and placing funds to themselves and related parties without the requisite collateral.
The directors and shareholders, who have been dragged before an Accra High Court, are William Ato Essien, Mensa Anamua Otabil, Oheneba Osei-Akoto, Stephen Enchill, Kingsley Attah Ghansah, Otabil and Associates and ICGC.
The rest are Kwadzo Ayisi-Ahwireng, Isaac Osah Thompson-Mensah, John Kofi Mensah, Edwin Obeng Donkor, Fitzgerald Odonkor, Amadu Montia, Kofi Kwakwa, Francis Adu-Mante and Isaac Thompson-Mensah.
In their statement of claim, the plaintiffs blamed the collapse of the bank on “mismanagement and breaches of the banking sector regulations.”
“The record shows that as a direct result of the misgovernance of the defendants and the willful breaches of the banking regulations, as at December 31, 2015, the plaintiff had a cumulative amount of approximately GH¢482 million as impaired and/or non-existent investments, which amount include a false representation of GH¢52.3 million misrepresented to the Bank of Ghana as required capital for the grant of the requisite banking licence,” the suit averred.
The suit averred that the acts and mismanagement of the shareholders of the bank resulted in the loss of funds, totalling GH¢748.251 million, which remain unpaid by them as promised.
It said the shareholders were engaged in a scheme of fraud on its customers, regulators and the public.
“The defendant knew or ought to have known about the breaches of Ghanaian banking regulations and company law being committed at the bank,” the suit averred.
The plaintiff stated that the shareholders supervised the disbursement of GH¢620 million banking liquidity support facility granted to Capital Bank by the Bank of Ghana (BoG) between June and November, 2015.
It stated that William Ato Essien requested the transfer of GH¢130 million of the liquidity support to All-Time Capital Limited in 2015, a company he owns and has shares in.
The plaintiffs averred that “although the senior management of the bank expressed their reservations about the transfer of the funds, Pastor Mensa Otabil, conscious at all material times, guaranteed that he would make sure Ato Essien repays the money by March 31, 2016 as promised.”
The plaintiffs stated that the loan, which remains outstanding and unpaid, was rather used to establish a rival bank, The Sovereign Bank, in breach of the banking sector regulations.
According to the plaintiffs, the shareholders further approved a total amount of GH¢27.5 million to Mr. Ato Essien as “protocol payments” or “business promotion upon receipt of the liquidity support from the Bank of Ghana.
Again, Ato Essien oversaw the grant of over GH¢29 million to companies owned by him or related companies which remain unpaid to date.
Apart from granting themselves illegal shareholder loans, the shareholders are also accused of purchasing “several commercial papers” on behalf of the bank, but Fitzgerald Odonkor, who was the Chief Executive Officer (CEO) of the bank, denied signing the commercial papers, claiming his signature was forged for the deals.
The shareholders had been accused of making a GH¢482 million non-existent investment and pleaded with the Central Bank to convert it into an actual loan which they will repay.
Although the Central Bank acceded to the request, the loan remains outstanding and unpaid by Pastor Otabil and the other shareholders.
Apart from Ato Essien, who took the highest loan granted to companies he owned or related to him, other shareholders of the defunct bank granted themselves millions of investors’ money illegally.
Otabil and Associates owned by Pastor Mensa Otabil was granted a shareholder loan of GH¢51.629 million while his Church, ICGC, was granted the same amount in shareholder loans which they have all failed to repay.
The shareholder loans granted Otabil and co according to the plaintiff are; William Ato Essien, GH¢468,405,125.00; Oheneba Osei-Akoto, GH¢36,664,299.00; Stephen Enchill, GH¢73,627,898.40; Kingsley Attah Ghansah, GH¢36,664,299.00; Otabil and Associates, GH¢51,629,319.00 and ICGC, GH¢51,629,319.00.
The rest are Kwadwo Ayisi-Ahwireng, GH¢4,114,380.50; John Kofi Mensah, GH¢15,713,271.00; Edwin Obeng Donkor, GH¢14,965,020.00 and Isaac Osah Thompson-Mensah, GH¢24,692,283.00.
The plaintiffs are therefore praying the court to order Pastor Mensa Otabil, William Ato Essien and the other shareholders to cough up GH¢748.251 million shareholder loans they granted themselves and promised to repay but have failed to do so.