Global Access Savings and Loans collapsed because of high rent charges by majority shareholder, Kofi Amoah: BoG report
The Bank of Ghana has revealed how Global Access Savings and Loans, owned by Dr Kofi Amoah, Chairman of the GFA Normalization Committee, became insolvent.
The report captured multiple infractions by the company and its majority shareholder, Dr Kofi Amoah.
The report said the institution recorded accumulated losses "due mainly to high rent expenses paid to the majority shareholder for the use of its premises."
In addition, the report noted that the majority shareholder, Dr Amoah, contracted a loan of GH¢2.91 million and made Global Access Savings and Loans assume liability for the loan.
"The loan amount was injected into the institution as equity capital. The liability was however concealed as a suspense account in the books of Global Access Savings and Loans Limited," the report further said.
Other infractions committed by the institution include:
- The institution’s Net worth of negative GH¢58.19 million as at end May 2019 indicates that its paid up capital is impaired in violation of Section 28(1) Act 930.
- The institution’s capital adequacy ratio of negative 195.06% as at end May 2019 is in violation of Section 29(2) of Act 930.
- The institution has breached the statutory cash reserve ratio requirement since 2016.
- The institution failed to keep accounting records in a manner that gives an accurate and reliable account of its transactions constitutes unsafe and unsound banking practice
- The institution failed to implement Bank of Ghana’s on-site examinations findings conducted in October 2018.
- There have been several complaints from customers about the inability of the Institution to honour depositors’ withdrawals.
- The company neither published nor submitted its 2017 Audited Financial Statements to the Bank of Ghana contrary to Act 930.
According to the BoG, the institution has been insolvent since 2016 with serious liquidity challenges.
"The reported capital adequacy ratio and net worth are both negative," the report said.
Global Access Savings and Loans Company Limited was incorporated under the laws of Ghana in 1998 and commenced business in February 2000 as a Partner Agent of ADB in the Western Union Money Transfer Business.
The company grew and added other money transfer services to its remittance product line. Following the changing need of customers, Management decided to convert the company into a Savings and Loans Company.
The company was granted a savings and loans company license on 15th June, 2009 by the Bank of Ghana and it commenced operations on December 6, 2010.