According to the report, emergency board and Executive Committee meeting held on October 13, 2015, over the use of GHc 610 million liquidity support to the bank which was struggling at the time.
Capital Bank did not use the liquidity support for the bank’s business. Instead the management with the approval of the Board Chair, used the money for other things, leading to the eventual collapse of the Capital Bank in August 2017.
A member of the Board, Ato Essien moved the money into companies believed to be owned by him and other people. Some of that money was allegedly presented as capital to secure a license for another collapsed bank, Sovereign Bank.
The major transactions were as follows; GHc 27.5 million used for business promotion and handled by a board member; transfers to IFS amounting to GHc 23.9 million, transfers to Nordea Capital amounting to GHc 65 million, and transfers to Alltime Capital amounting to GHc 130 million.
In the transfer to Alltime Capital, the report said that “Mr. Ato Essien stated that the placement of GHc 130m with Alltime Capital was strategic and funds would be paid back by March 2016.”
Dr Otabil also assured management that he would ensure the funds were returned by March 2016.
Alltime Capital provided evidence that it was acting as an arranger for two separate commercial papers purchased by Capital Bank and issued by MC Management services limited.
The commercial papers are seen to be signed for Capital Bank by both its CEO, Rev. Fitzgerald Odonkor, and Chief Business Officer, Horace Tettey, according to the report.
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Meanwhile, Nordea Capital which reportedly received GHc 56 million from Capital Bank, denied receiving the money.
“[Nordea Capital] indicated in two letters to the transaction advisors dated 13th and 28th December 2017 that it had acted as arranger for the issuance of commercial paper to the bank from MC Management services (GHs30m) and Breitling Services (GHs35m) on the instructions of the CEO, Rev. Fitzgerald Odonkor.”
But Rev. Fitzgerald Odonkor “denied having signed or authorized any of the commercial paper transaction arranged by either Alltime Capital or Nordea Capital. He subsequently sent a copy to the transaction advisors of an email dated December 14, 2017, to the Board Chairman, Dr. Otabil and majority shareholder, Mr. Ato Essien.”
A section of the email from Rev Odonkor stated that “Please, my attention has been drawn to document purported to have been signed by in respect of commercial paper for GHS100 million issued to MC Management Services through Alltime Capital. Please, I haven’t signed for any such commercial paper issue and do not know the said company so will be grateful if you could help resolve this issue.”
The report recommended that “the situation requires further investigations if the signature on the commercial paper proves not to belong to Rev. Fitzgerald Odonkor.”
Meanwhile, the report also noted that “the placement of GHs 130m to Alltime Capital and GHc65m with Nordea Capital were a round-tripping of the liquidity support of the Bank of Ghana to set up Sovereign Bank [which also collapased].”