It has emerged that Founder and Leader of the International Central Gospel Church, Dr Mensa Otabil and board members of the defunct Capital Bank misused a whopping GHC610 million liquidity support that was offered to them by the Bank of Ghana in 2015.
Report indicates that the Pastor Mensa Otabil led-board threw caution and decorum to the wind when they squandered the said amount of money meant to salvage Capital Bank from total collapse.
Media reportsÂ on WednesdayÂ suggest the board doled out the money to their private companies and institutions they have interest in â€“ an absolute breach of the banking regulations.
How Capital Bank officials wasted the tax payers money
The board after receiving the cash dished out Â¢27.5m to a Board member to hype the business. The word in the report was “business promotion”. While still under distress but having received the bail-out, the board approved an expenditure of Â¢2.6M and $50,000 on â€œre-branding.â€
The board also â€œratifiedâ€ a proposal to increase the fees and benefits of directors, including two first and business class air tickets forÂ all members of the board.
Not done, some 130m was transferred to Alltime Capital, a transfer that needed some explanation from the CEO Ato Essien who said the transfers were “strategic,” and â€œhighly classified information.â€
The transfers were expected back into the bank by March 2016 – in five months, he said with additional assurance from the chairman, Dr. Mensa Otabil.
Alltime Capital, all this time, was however acting as an arranger for the transfer of the Â¢130m to two other companies.
MC Management Services Ltd owned by one Dr. Tetteh Nettey and Abdul Rahman Abukari got Â¢100m cedis and Pronto Construction and Supplies Ltd owned by one Paanii Tackie who got Â¢20m.
While Alltime Capital got 130m, Nordea Capital also got Â¢65m of this Bank of Ghana aid money to Capital Bank.
Capital Bank sat back to watch their money working itself up and working itself back into their hands.
The GCB in 2017, took over Capital Bank and UT Bank under a purchase agreement approved by the Bank of Ghana.
The Governor of the Bank of Ghana, Dr Ernest Addison, speaking at the time, blamed the lack of good corporate governance for the collapse of the two banks.
He added, â€œthe revocation of banking licenses of UT and Capital bank due to significant capital deficiencies, also partly reflected poor corporate governance practices within these institutionsâ€.
Dr. Addison stressed that good corporate governance is not only essential to minimizing risk but it is also fundamental to improving economic performance.
GCB Bank has since absorbed about four hundred workers.
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