The report indicates there was a significant amount of inter-group lending involving other subsidiaries of the holding company, UT Holdings.
This was revealed in an investigative report after investigations were conducted into the operations of now-defunct UT and Capital Banks.
The loans which amounted to GHC 5m were never disclosed to the Board of the UT Bank.
According to the report, there was a significant amount of inter-group lending involving other subsidiaries of the holding company, UT Holdings. Meanwhile, connected party loans were made to some companies listed below:
Ibrahim Mahama’s Related Companies, amounting to GHC 261.4 m and US $ 6.4 m
Quincy Sintim’s Related Companies, amounting to GHC 84.1 m
Beige Group’s Related Companies, amounting to GHC 10.9m
The report said that “the bank sought a waiver of the Ibrahim Mahama related companies’ single obligor violations by the Bank, yet undertook a pass through US $6.4 million transactions by giving Beige Capital Savings and Loans a US $5 million placement as guarantee for Beige to extend a US$5 million loan to Hodman Brothers.”
“Placing foreign currency with a savings and loans company is a breach of the Banking Law. Likewise, the extension of a United States Dollar loan facility by a savings and loans company was in breach of the banking regulations,” the report added.
Meanwhile, the report alleged that the board of Capital Bank squandered BoG cash which was provided as liquidity support.
The report alleged that the bank’s then-Board Chair, Dr. Mensa Otabil was party to the misuse of liquidity support given the bank by the Bank of Ghana (BoG).
The report cites an emergency board and Executive Committee meeting on October 13, 2015, over the use of GHc 610 million liquidity support to the bank which was struggling at the time.
The GCB in 2017, took over the two banks under a purchase agreement approved by the Bank of Ghana.
GCB Bank has since absorbed about four hundred workers.