ICGC Otabil, still in court over Capital Bank collapse

Some have questioned why other important decision-makers in the bank were not equally prosecuted in the wake of the sentence handed down by an Accra High Court to William Ato Essien, the founder of the now-defunct Capital Bank. The International Central Gospel Church’s leader, Dr. Mensah Otabil, has been mentioned frequently as the board chairman.

It is important to note that Dr. Otabil and 14 other people have been the targets of a civil lawsuit brought by the Receiver of the failed bank since 2019, despite the fact that no criminal charges have been brought against him. The 14 others include William Ato Essien, Oheneba Osei Akoto, Stephen Enchill, Kingsley Atta Ghansah, Otabil and Associates, International Central Gospel Church (ICGC), Kwadwo Ayisi Ahwireng, Isaac Osah Thompson-Mensah and John Kofi Mensah who are all shareholders of the defunct company and Fitzgerald Odonkor, Amadu Montia, Kofi Kwakwa and Francis Adu-Mante who were directors of the company.

Why Civil action?

More than 800 million cedis are being sought by the Receiver from these people. For instance, Ato Essien and his related companies were given facilities totalling 108 million cedis and 468 million cedis, respectively, of which the High Court is being asked to recover. A recovery of 51 million cedis from the ICGC has also been requested from the court.

Allegations of Fraud

In court documents, the receiver claims that the directors of the bank that went out of business approved loans and the placement of funds for themselves and connected parties without the necessary collaterals and in blatant violation of internal company policies, applicable banking regulations, and Ghanaian company law.

The directors are accused of violating banking regulations and policies set forth by the Central Bank by supervising the distribution of liquidity support (620 million cedis) provided by the Bank of Ghana. Management of the Company expressed its displeasure at a board meeting in October 2015, in particular regarding the transfer of 130 million cedis to All-Time Capital out of this liquidity support. Members of senior management indicated that the transfer in question would not be approved. According to reports, Dr. Mensah Otabil, the board chairman, promised management that he would personally see to it that the money was returned by March 31, 2016. The Receiver claims that this balance is still unpaid.

https://3news.com/failed-banks-we-didnt-do-enough-forensic-investigations-kpebu/

The receiver then charges the directors and shareholders with fraud. The receiver states that the directors and shareholders consented to the purchase of commercial paper from related companies in breach of regulations. A commercial paper is a short-term, unsecured debt issued by a corporation to finance obligations. According to the receiver, these instruments were in fact, and to the directors’ knowledge, not suitable for classification as a commercial paper and merely a scheme to extort funds from the bank.

State of Case

The case has not made much progress due to various legal steps taken, particularly by Mr. Ato Essien, who got the Court to allow him to challenge the Bank of Ghana’s repudiation of the permit. The Tall Court case has remained on hold as discussions on this continued at the Tall Court as well as the Court of Offer after the Court of First Instance ruled in Mr. Essien’s favour. Just like the Tall Court, the Court of Offer has also allowed Mr. Essien to challenge the activities of the BOG under the same suit. The Tall Court has set November 21 as the date for hearing legal arguments on whether or not the Collectors are competent to sustain the legitimate activity as the resources of the Bank currently have a place for GCB Bank.

FAQs

What is the allegation against the directors of the failed bank? The directors of the bank that went out of business approved loans and the placement of funds for themselves and connected parties without the necessary collaterals and in blatant violation of internal company policies, applicable banking regulations, and Ghanaian company law.
What amount is being sought by the Receiver from the targets in the civil lawsuit? More than 800 million cedis.
What are the directors accused of violating in court documents? Banking regulations and policies set forth by the Central Bank.
Why has the case not made much progress? Various legal steps have been taken, particularly by Mr. Ato Essien, who got the Court to allow him to challenge the Bank of Ghana’s repudiation of the permit.
Why is the Tall Court case on hold? Discussions on Mr. Ato Essien’s challenge to the Bank of Ghana’s repudiation of the permit continued at the Tall Court as well as the Court of Offer after the Court of First Instance ruled in Mr. Essien’s favour.