The charges filed by the state against some persons alleged to be involved in the collapse of Capital Bank has been questioned by my good self.
Some have also asked what is the basis of my pessimistic stance on the success of those charges.
What are the charges? The charges basically are stealing and money laundering flanked by inchoate offences of abetment and conspiracy.
It comes as a big shock to me that the infractions cited by the Bank of GHANA are not acts that are criminalized under the Banks and Specialized Deposit Institutions Act of 2016 (Act 930). The Bank of Ghana pushed this Act through parliament after all the experiences of failed banks, corrupt practices and fraud in the dealings with depositors funds.
However, with the kind of threat these anti-social conduct poses to the entire financial system, the Bank of Ghana and Parliament failed to characterize these acts as offences in the Act and have them defined.
So, for example, the Boulders Report alleges the following against the key figures at Capital Bank and yet none could be said to be a crime prosecutable under the Banking Act.
Shockingly punishments have been copiously provided for offences under sections 152, 153 and 154 of the Act. You ask which offenses are these punishments meant for and you hit a wall. YOU FIND NOTHING.
Article 19 of the constitution provides that for every statute creating an offence, the offence must be defined and the punishment for the offense clearly states in the statute. The Banking Act fails to create any offense or define any and yet provides punishment for offenses. Is this negligence or a deliberate blunting of the law for perpetrators to walk free?
The Bank of Ghana it has been claimed by some cannot be absolved of blame in this whole so-called banking crises cleanup. I will agree if this whole exercise is conducted without any urgent action to create and define prosecutable offences for the acts that they claim brought about the crises. The Central Bank, for now, is a toothless bulldog or even a lame duck in the scheme of things.
With this hiatus in the law and with pressure mounting in the Attorney General from party foot soldiers for the prosecution of some people who now want to come out of their rat holes, some charges of stealing and money laundering have been filed.
What is stealing under our laws? This can be found in sections 124, 125 126, and 127 of the Criminal Offences Act of 1960.
The essential elements of the offence of stealing are a dishonest appropriation of a property belonging to another.
The law goes on the define dishonest appropriation as an appropriation made (a) with an intent to defraud; or
(b) if it is made by a person without claim of right and with a knowledge or belief that the appropriation is without the consent of some person for whom he is trustee or who is owner of the thing as the case may be; or
(c) that the appropriation if known to any such person be without his consent.
Some of the allegations against Capital Bank include one that on March 30, 2016, the CEO of the Capital Bank wrote to the Head of Banking Supervision about a non-existent investment of ¢482.4 million. A revelation that its majority shareholder allegedly used GH¢80m of depositors’ and public funds for his personal piggy bank.
That Mr Ato Essien, who founded the bank, allegedly “flouted all banking and risk management rules” in the management of monies saved there by its customers.
That Capital Bank shareholders had only ¢23.3m — less than 50 per cent of the ¢60m capital requirement. In their defence, they also produced evidence to show they had ¢51.5m illiquid investment — basically money that one could see but could not touch.
Then he personally invested those monies into businesses in breach of standard corporate governance practices. The report stated that depositors’ money was pushed into 10 business ventures in the country.
It is also claimed that some of the businesses established by Mr Essien using depositors’ monies are Ocean Spring Mineral Water, Breitling Services, Gye Nyame Realty Ltd, Capital and More Co. Ltd, Accent Financial Services Ltd, Life Assurance Ltd and Capital Africa Group. They also invested in companies where Mr Essien has links, including Nordea Capital, Commerz Savings and Loans and the now defunct Sovereign Bank. Capital Bank also invested in Zimbabwe with First Capital Plus LLC, Gye Nyame Resources LLC and Bill Minerals LLC.
It is very surprising that all these allegations did it produce any charge apart from that of stealing that requires the appropriation of something without the consent of the owner. We know that much of what has gone on was done with the blessing of the Board of Directors with some alleged to have issued personal guarantees for the repayment of the funds allocated.
From the above, the element of some dishonest appropriation will be difficult to prove without more in the area of fraud and other offences involving dishonesty. We cannot but question the resolve of the Attorney General to achieve a successful prosecution.