BoG didn’t give Biege Bank fair hearing before being declared insolvent –Witness

Dawda M. Hafisadeen, a former Chief Financial Officer (CFO) of the defunct Beige Bank, says the Bank of Ghana (BoG) declared his outfit insolvent without an opportunity of fair hearing.

According to him, Beige Bank was denied the opportunity for explanation, despite being given 10 days to do so.

Mr. Hafisadeen, now a lawyer, working with the Legal Aid Commission, stated that BoG after declaring Beige bank insolvent, on the same day it sent the universal bank queries, appointed Nii Amanor Dodoo as the bank’s receiver.

This follows some findings made by the BoG on some selected assets of the bank in performing its regulatory functions sometime in July 2018.

Mr. Hafisadeen, testifying as first Subpoenaed Defence Witness (DW1) for the accused, Michael Nyinaku, Founder and Chief Executive Officer (CEO) said the report of that BOG supervision exercise was received by the bank on the morning of August 1, 2018.

However, the BoG did not wait for Beige to respond to the issues raised after its supervision exercise and “The receivership started on the afternoon of August 1, 2018 after I had returned from the BoG with the CEO and the Board Chairman to receive notice of the revocation of the Bank’s license.”

According to him, Michael Nyinaku, who is currently facing 43 charges in respect of the suit before Justice Afia Serwaa Asare-Botwe, had discussions with him on the findings of BoG.

Justice Asare-Botwe, a Court of Appeal judge with an additional responsibility of the Accra High Court, was told yesterday that the two findings made by the BoG were that two of the Beige shareholders had injected an additional amount of GH¢102 million into the bank, which was held as deposit for shares yet to be issued.

The other issue has to do with Beige bank’s liabilities exceeding the value of its assets in the region of GH¢64.27 million.

Narrating how the receivership happened, the witness added that the declaration was followed with meetings between himself, Nyinaku and officials from the BoG, Receiver and Consolidated Bank Ghana (CBG).

Although Mr Hafisadeen expected that there will be a continuous engagement between the defunct bank officials and the Receiver, such did not happen.

The witness worked with the CBG, as well as the Receiver, but never was he made aware of any final report prepared on the defunct bank by the Receiver, saying “if any such final accounts were generated, it was not done with my participation.”

He informed the court that he assisted the CBG and Receiver with all the relevant information about the defunct bank, but was concerned about the testimonies of Julius Ayivor, leader of the Receiver team and the police investigator.

His particular concerns were the reports that Mr Ayivor submitted to the Attorney General’s office and BoG.

The former CFO of Beige was not privy to the inventory report prepared by the Receiver and submitted to BoG, therefore, was not sure whether the report reflected the collapsed bank’s state of affairs.

As result, he said “for the reasons noted above, I find it safe to conclude that Exhibit 1 is a mere draft report. The information contained in Exhibit 1 is not conclusive and for which reason, actions that are taken by users of this report, which actions are premised upon information contained in this report may be pre-mature.”

He noted that giving the fact that issues concerning the operations of a large business entity also affect the liberty and integrity of a lot of stakeholders, if reports of the receiver were to be more conclusive, it would have more binding effect.

He made the statement in reference to several sections of the report that the Receiver made remarks such as “adjusting entries may have to be passed”, “validation work that is on-going,” and “farther adjustments may have to be passed after ongoing validation entries are completed”.

And as a professional accountant, he noted that “all these remarks give an indication that Exhibit 1 is more of an interim report whose details are subject to change after the results exercises that were ongoing at the time Exhibit 1 was authored.”

Furthermore, he argued that the updated version of Exhibit 1, which the Prosecution claims has been sent to the BoG was not tendered in as part of the exhibits in the court.

The witness started working with the bank from 2012, when it was a microfinance company to a savings & Loan company and then to a universal bank in 2017 until it went in receivership in 2018.

He also held other portfolios in the bank before becoming the CFO including regional manager of Ashanti region.

Prior to working with Beige, the witness had worked with other financial institutions like the Intercontinental Bank Limited, which is now Access Bank.

His former boss is standing trial for siphoning depositors’ funds into suspicious accounts, but the latter has pleaded not guilty.

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