Michael Nyinaku
Julius Ayivor, a leading member of the team that reviewed the accounts of defunct Beige Bank, has downplayed allegations of bad faith in the decision of the Bank of Ghana (BoG) to revoke the operating licence of the bank in August 2018, after it had been declared insolvent by the Central Bank.
According to him, the defunct bank’s own Board of Directors had raised concerns at their meetings that “the bank was having serious liquidity challenges, meaning the bank couldn’t pay deposits that had been placed with it as and when those deposits matured.”
Mr. Ayivor, who is the first prosecution witness in the trial of former Chief Executive Officer of Beige Bank, Michael Nyinaku, who is accused of stealing over GH¢1.2 billion from the bank, was responding to questions under cross-examination that the BoG’s revocation of the defunct bank’s licence was done in bad faith.
Thaddeus Sory, counsel for the accused, during the cross-examination indicated that banks whose activities are considered to be irregular are usually given the opportunity to regularise such adverse findings, but that was not done in the case of Beige Bank.
“I am putting it to you that in this particular instance you never gave Beige Bank an opportunity to correct any irregularities by reference to the 1st August 2018 date when you were seconded to the Receiver,” Mr. Sorry suggested.
The witness said that was not the case because once the bank’s licence was revoked, all powers of management, directors, and shareholders of the bank were suspended, and those powers were reposed in the Receiver, effectively causing the Receiver to become the sole legal representative of the bank.
He said the Receiver’s obligations at that point regarding findings and discussions were towards the BoG, and if there were any matters that required clarification, he engaged some of the former staff that were still at post, especially those that worked in the financial and the credit department, including in some instances the accused person.
“I am not aware whether or not there were any discussions between the BoG and the former management of Beige Bank post 1st August 2018 in relation to the irregular transactions that were identified,” the witness added.
Mr. Sory also suggested that by a letter dated August 1, 2018, Bank of Ghana had informed Beige Bank that it was giving it an opportunity to regularise any adverse findings it had made against the bank. The witness said he was not aware.
“I am, therefore, finally putting it to you that the Bank of Ghana deliberately appointed the Receiver who constituted the team to perpetuate the decision of the Bank of Ghana against the Beige Bank,” the lawyer averred.
“My Lady, I am not in a position to answer that… the board also noted that there was a general lack of confidence in the bank and mandated management to ensure that these issues were resolved. So, therefore, I would not be surprised if the Board of Directors of Beige Bank themselves saw this coming,” the witness answered.
Mr. Sory then asked the witness if he knew the source of funds from which KPMG is paid as a result of its employees being seconded to the Receiver. The witness said they are from proceeds realised from the receivership assignment in accordance with the requirements of the Banks and Specialised Deposit-Taking Institutions Act, 2016, Act 930.
“Because of the source of his fees, the Receiver and also KPMG have a special interest in the assignment entrusted to them by the BoG in respect of the bank. I put that to you,” Mr. Sory suggested.
“The Receiver’s interest and that of KPMG’s would be to execute the receivership work in accordance with the Receiver’s mandate as stipulated by the Act and also based on the directions that BoG will from time to time give the Receiver in the course of his assignment,” Mr. Ayivor responded.
The court, presided over by Justice Afia Serwah Asare-Botwe, a Justice of the Court of Appeal sitting as an additional High Court judge, adjourned the case to February 10, 2023 for continuation of the cross-examination.
BY Gibril Abdul Razak