Sunday, 23 February

Duffuor, others sued for GHS5.7bn uniBank money

General News

The now-defunct uniBank Ghana Limited which is under the receivership of Nii Amanor Duodoo has sued the bank’s former owner Dr Kwabena Duffour, HODA Holdings Ltd, Star life Assurance and 7 others at the High Court to recover some GHS5.7 billion it claims was unlawfully taken from the bank.

The plaintiff is praying the court to restrain Dr Duffuor from selling several assets of the defunct bank.

uniBank was merged with four other struggling local banks by the Bank of Ghana to form The Consolidated Bank Ghana Limited in 2018.

The BoG appointed KPMG as Official Administrator (OA) for uniBank. 

Key findings from KPMG’s reports indicated serious corporate governance, risk management, compliance and management flaws, as well as unlawful transactions involving shareholders, related parties, and connected parties.

In particular:

1. uniBank had given out amounts totaling GH¢1.6 billion to shareholders and related parties in the form of loans and advances without due process and in breach of relevant provisions of Act 930.

2. In addition, these shareholders and related parties had also been given amounts totaling GH¢3.7 billion which were neither granted through the normal credit delivery process nor reported as part of the bank’s loan portfolio.

3. They were also not secured with collateral, and attracted no interest income for uniBank. Altogether, shareholders and related parties of uniBank had taken out an amount of GH¢5.3 billion, constituting 75 per cent of total assets of the bank;

4. Out of total customer deposits of GH¢4.3 billion, GH¢2.3 billion was not disclosed to the Bank of Ghana. Loans and advances to customers were also overstated by GH¢1.3 billion in prudential returns to the Bank of Ghana;

5. Over 89% of uniBank’s loans and advances book of GH¢3.74 billion as of 31st May 2018 was classified as non-performing, in addition to amounts totalingGH¢3.7 billion given out to shareholders and related parties which were not reported as part of the bank’s loan portfolio;

6. After making allowances for impairments to recognise the deterioration in the quality of uniBank’s assets and other requirements under Bank of Ghana’s capital adequacy framework, uniBank was balance sheet insolvent with negative shareholders’ funds of GH¢6.78 billion as at 31 May 2018 (representing assets of GH¢ 2.38 billion less liabilities of GH¢9.15 billion);

7. The bank therefore has a capital deficit of GH¢7.4 billion, compared to the regulatory minimum of GH¢ 400 million;

8. After making adjustments to uniBank’s balance sheet to offset outstanding debts totaling GH¢ 428,817,961 owed it by Government contractors (backed by Interim Payment Certificates issued by the Government), the bank’s liabilities (including an amount of GH¢ 3.04 billion owed to the Bank of Ghana) remain significantly more than its assets, and is therefore insolvent.

The bank’s directors, however, denied any wrongdoing.