Pastor Otabil was the Board Chairman of the defunct bank, while the ICGC was named as a shareholder of the bank in the suit.

The suit was filed at the Commercial Division of the Accra High Court by the receivers of the defunct bank, Mr Vish Ashiagbor and Mr Eric Nipah, both of PricewaterhouseCoopers (PwC).

The plaintiffs are seeking to use the legal action to recover over GH¢837 million, being what they said were loans that the shareholders granted to themselves which remained unpaid.

By their alleged actions, the plaintiffs said, the defendants “have breached their fiduciary duties under the Companies Code, 1963 (Act 179) and have caused serious financial loss to the bank’’.

 

Defendants

The shareholders and the directors joined to the suit as defendants in the Capital Bank suit include the Founder of the Capital Bank, Mr William Ato Essien; Mr Oheneba Osei-Akoto, Mr Stephen Enchill, Mr Kingsley Atta Ghansah, Otabil & Associates, Mr Kwadwo Ayisi-Ahwireng, Mr Isaac Osah Thompson-Mensah and Mr John Kofi Mensah.

The rest are Mr Edwin Obeng Donkor, the former Chief Executive of the bank; Mr Fitzgerald Odonkor, Mr Amadu Montia, Mr Kofi Kwakwa and Mr Francis Adu Mante.

Revocation of licence

On August 14, 201, the licences of the Capital Bank and the UT Bank were revoked by the Bank of Ghana (BoG) after the BoG had declared them insolvent.

The BoG allowed the state-owned bank, the GCB Bank, to acquire the two banks in order to protect depositors’ fund and also enable them to stay afloat.

The hurricane that swept through the banking industry due to the collapse of the two banks further heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity known as the Consolidated Bank.

Shareholders’ loans

In their statement of claim, the plaintiffs said the defendants “wilfully breached banking laws”, as a result of which, as of December 31, 2015, the bank had about GH¢482 million as “non-existent’’ investments on its books and loans granted to the defendants.

The statement of claim averred that by a resolution on May 3, 2016, the shareholders agreed to repay the said loan “in proportion of their shareholding’’.

It said as of August 14, 2017 when the licence of the bank was revoked, the shareholders were in debt to the tune of GH¢748,251,000.

The outstanding amounts to be paid by the defendants, as stated by the statement of claim, were: Essien, GH¢468,405,126; Osei-Akoto, GH¢36,664,299; Enchill, GH¢73,627,898; Atta Ghansah, GH¢36,664,299; Otabil & Associates /ICGC, GH¢51,629,319; Ayisi-Ahwireng, GH¢4,113,330; Kofi Mensah, GH¢15,713,271; Obeng Donkor, GH¢14,965,020, and Osah-Thompson-Mensah, GH¢24,692,283.

Apart from these outstanding amounts, the statement of claim said Mr Essien took a loan of about GH¢108 million for himself and the companies that he owned or in which he had vested interest.

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Alleged fraud

The plaintiffs further alleged a series of fraudulent actions, including the use of “a non-existent GH¢52.3 million investment certificate” by the defendants to top up the capital of the bank in order to obtain a universal banking licence.

“These funds were eventually included in the balance of bad placement that was converted into shareholders’ loans which were never paid,’’ they said.

Another allegation of fraud, the plaintiffs said, was the approval of the bank’s money for Mr Essien to be used as payment for mature investments for fixed deposits in Capital & More Limited, a company owned by Essien.

“In several instances, the said investments were honoured by the bank and debited to the account of Capital & More Limited, a company owned by the 1st defendant (Essien),’’ they said.

The plaintiffs also accused the defendants of engaging in a “scheme of fraud on its customers, regulators and the public”.

Misuse of BoG’s support

The statement of claim further averred that the defendants “mismanaged and breached banking laws’’, a situation that put the bank in a precarious financial situation.

As a result of the dire financial situation of the bank, the plaintiffs said, between June and November 2015, the BoG granted a GH¢620-million liquidity support to it.

Mr Essien, the statement of claim said, transferred GH¢130 million out of the liquidity support into his personal company known as the All-Time Capital Limited.

“The amount of GH¢130 million remains outstanding and unpaid. The amount was rather used to set up Sovereign Bank, another bank in which the 1st defendant (Essien) had a vested and material interest,’’ it added.

Apart from the GH¢130 million, the statement of claim alleged, the defendants approved GH¢27.5 million for Mr Essein which was used as ‘protocol payment’ or ‘business promotion’ “payment for the receipt of the liquidity support from the Bank of Ghana’’.

Reliefs

According to the statement of claim, all attempts by the receivers to recover the loans from the shareholders had proved futile.

The plaintiffs are, therefore, seeking a declaration from the court that the actions of the defendants were in breach of Act 179.

They also want an order directed at all the shareholders to pay the outstanding loans that they owed.

UT Bank

Meanwhile, the PwC, which is also the receiver for another defunct indigenous bank, the UT Bank, has dragged UT Holdings and UT Logistics Ghana Limited to the Accra High Court in a bid to recover more than GH¢98 million which, it says, are debts owed the bank by the two companies.

According to the writ of summons, UT Holdings and UT Logistics were shareholders of the defunct bank that used their position to secure loans from the bank but had refused to pay the loans, despite several attempts by the receiver to recover them.

“As of August 14, 2017, the 1st defendant (UT Holdings) had an outstanding amount of GH¢51,334,387 and $8,612,829. The second defendant (UT Logistics) also had an outstanding loan balance of GH¢9,313,700,’’ the statement of claim said.