Opinion: Nduom is solely responsible for the woes of GN Bank and not Ken Ofori-Atta

Dr Papa Kwesi Nduom’s constant refrain concerning the accusations against Ken Ofori-Atta as having gotten his GN bank’s license revoked more than verges on the ludicrous.

Consistently, he has been blaming Ken Ofori-Atta for the revocation of GN Bank’s operating license to give his entity, Databank an advantage. Dr Nduom should tell this to the Marines.

First of all, what competition exists between Databank and GN Bank in terms of their operations? GN Bank is a bank in the real sense of the word but can the same thing be said about Databank? No!

GN Bank offers mainstream banking services which include cash deposits and withdrawals, savings and loans and financial advice consultation (private banking, corporate banking, consumer banking, corporate products, lending products, special services, and money transfer, Databank’s operations are completely different.

Databank, on the other hand, offers corporate finance, brokerage, fund management, and research services to local and foreign individuals, multinational companies, pension trusts, and institutional investors for the ECOWAS sub-region.

Through Databank’s brokerage wing, investors can tap into fixed-income investments (including treasury bills), trade shares listed on the Ghana Stock Exchange and enjoy corporate finance advisory services.

Through their asset management wing, investors can access more mutual funds than any other investment bank in Ghana (Epack, MFund, BFund, ArkFund and EdIFund), institutional fund management for corporate, benefit and endowment funds, pension fund management and private wealth management services.

Looking at the functions of Databank, how would the death of GN Bank be beneficial to Ken Ofori-Atta when GN Bank’s areas of operations are parallel to those of Databank?

Dr Nduom’s claims are not in sync with the facts on the ground. Ken Ofori-Atta would not benefit a dime from the extinction of GN Bank in any way or form.

It is sad that Dr Nduom is blaming innocent people and entities for his predicament when his own actions and inactions led to the Bank of Ghana revoking GN Bank’s operating license, so he should stop pointing accusing fingers at Ken Ofori-Atta or the Bank of Ghana for that matter.

It is imperative to reiterate the fact that several factors led to his bank’s license being revoked, but I will talk about a few of them so that Ghanaians can appreciate the issues better.

In addition to GN’s insolvency and liquidity challenges, the Bank of Ghana found other key regulatory violations such as the following:

The institution’s adjusted net worth of negative GH¢30.70 million as at end-May 2019 indicated that its paid-up capital was impaired in violation of Section 28(1) of Act 930.

The institution’s adjusted capital adequacy ratio of negative 61.20% at the end of May 2019 violated Article 29(2) of Law 930.

Unlike article 64 (2) of the Banks and Specialised Depository Institutions Act of 2016 (Act 930), the institution’s exposure to its related party had been consistently above the regulatory limit of 25% of own funds net (NOF).

Exposures to other subsidiaries were mainly payments made by the bank on behalf of such subsidiaries. These monies used to pay other Groupe Nduom’s entities were never returned to GN Bank.

GN’s balance sheet structure clearly showed that the bank mobilized deposits for its related companies. The inability of these related companies to meet their obligations to GN had resulted in serious liquidity challenges and contributed to their insolvency, as all related party exposures were non-performing.

The institution’s high levels of delinquency were mainly attributed to these exposures to related parties, which were never paid, thus putting its clients’ deposits at risk.

A Bank of Ghana investigation conducted into GN revealed that a significant amount ($62,255,516.93, GBP 718,528.59 and EUR 4,200) of depositors’ funds held at GN had been transferred to International Business Solutions (another company owned by Groupe Nduom and based in the USA) without any documentation supporting such transfers in violation of section 19 of the Foreign Exchange Act 2006, Act 723, Section IV of the Bank of Ghana Notice No BG/GOV/SEC/2007/4, and subsequent Bank of Ghana Notices issued in August 2014 prohibiting such practices.

The company had not yet published its audited accounts for 2018, in violation of Article 90 (2) of the Banks and Specialized Depository Institutions Law 2016 (Law 930).

Furthermore, the company failed to maintain accounting records in a manner that gives an accurate and reliable account of the company’s transactions and, therefore, did not present a true and fair view of its operations.

GN had suspended operations at seventy (70) of its branches, including the head office branch at Asylum Down and Castle Road, and temporarily suspended its entire management team without the approval of the Bank of Ghana, contrary to section 25(2) of the Specialized Banks and Depository Institutions Act 2016 (Act 930), primarily as a result of its insolvency and liquidity challenges.

In the face of the issues captured above, how Nduom could fixate his attacks on Ken Ofori-Atta for revoking his bank’s license is more than puzzling.

In any event, he had the cause to petition the High Court and got thrown out. He proceeded to the Court of Appeal and lost.

If indeed he was mistreated or unjustly treated as he’d want us to believe, the courts would have adjudicated the matter in his favour.

He cannot also blame the central bank and neither can he blame any other entity. Dr Papa Kwesi Nduom is solely to blame for the revocation of GN Bank’s license, and not Ken Ofori-Atta.

The opinion piece is written by P.K. Sarpong, Whispers from the Corridors of the Thinking Place.

Asaase Broadcasting Company airs on Asaase 99.5 Accra, Asaase 98.5 Kumasi, Asaase 99.7 Tamale, Asaase 100.3 Cape Coast, AsaasePa 107.3 (Accra).
Affiliates: Azay FM 89.1 (Takoradi), Bawku FM 101.5, Bead FM 99.9 (Bimbilla), Mining City Radio 89.5 (Tarkwa), Nyatefe Radio 94.5 (Dzodze), Somuaa FM 89.9 (Gushegu), Stone City 90.7 (Ho) and Wale FM 106.9 (Walewale).
Listen online: asaaseradio.com, Sound Garden and TuneIn.
Follow us:
X: @asaaseradio995, @Asaase985ksi, @Asaase997tamale, @asaase1003, asaasepa1073
Instagram: asaaseradio99.5, asaase985ksi, asaase100.3, asaase99.7tamale, asaasepa107.3
LinkedIn: company/asaaseradio995. TikTok: @asaaseradio99.5, Facebook: asaase99.5, asaase985ksi, Asaase100.3, asaase99.7, AsaasePa107.3.
YouTube: AsaaseXtra.
Join the conversation. Accra: call 020 000 9951/054 888 8995, WhatsApp 020 000 0995. Kumasi: call 059 415 7985 or call/WhatsApp 020 631 5260. Tamale: call/WhatsApp/SMS 053 554 6468. Cape Coast: call/WhatsApp 059 388 2652.
#AsaaseRadio
#AsaasePa
#TheVoiceofOurLand

The post Opinion: Nduom is solely responsible for the woes of GN Bank and not Ken Ofori-Atta appeared first on Asaase Radio.