Govt's claim that 96% of locked-up funds in banking sector clean-up paid false - ASEPA

The Alliance for Social Equity and Public Accountability (ASEPA) has described as false claims by the government that more than 96 percent of depositors who had their monies locked-up from the banking sector clean-up been paid in full.

Ken-Ofori-Atta

A Deputy Finance Minister, Charles Adu Boahen said 20 percent of the monies were paid in cash while 80 percent was paid in bonds.

He told Parliament during the debate on the Mid-year Budget Review that "The bonds were structured to pay out over four years."

He said the brouhaha being made about non-payment of the monies is by the four percent whose monies are still locked-up.

He said the government has set aside ¢3.1 billion for the payments which would be done once the courts grant the receiver the right to liquidate the assets of the defunct financial institutions.

ASEPA in response said the Deputy Minister peddled falsehood.

In a statement signed by its Executive Director Mensah Thompson, it said "Less than 5% of Customers of Fund Management Companies have actually been paid, for Savings and Loans Companies the estimate is around 3% of customers and the Microfinance is hovering around 6%.

"Commercial banks/Universal banks have the highest number of Customers paid, because of the 50% discounted coupon been redeemed at CBG. Close to 15% have redeemed their 5years Non-tradeable Zero Coupon bonds at CBG at a discount of 50%. Which means they had to forfeit half of their locked-up funds."

Here's the full statement by ASEPA:

The Deputy Minister for Finance was in Parliament a few days ago answering questions on the so-called Banking Sector Reforms and made a number of untruthful claims which we would like to clarify.

Prominent of them was the claim that about 96% of customers of Collapsed Financial Institutions have received their locked-up funds and that those who haven’t received their funds yet is as a result of some legal actions some of the Banks have taken against the receiver.

1. First of all, that claim is NOT only FALSE but extremely Capricious.

Apart from UT bank and Capital which the BoG asked GCB to take over some selected Assets and Liabilities of these two banks after is vicious collapse, which led to some payments of customers, NOT so much has been done to pay Customers of the Collapsed Financial Institutions apart from Needless Validations, Re-Validations and Counter Validations by the Reciever.

2. Even in the case of UT Bank and Capital Bank, Government did NOT give GCB money to pay the Customers, however, it issued a bond of GHC2billion to GCB putting GCB under pressure to dip its hands into its own reserves to pay off some of the customers of the collapsed UT and Capital Bank.

3. Government deliberately leaked information on banks targeted for Collapse to its inner circle members and friends, This made Companies like Databank and Persons close to Government quietly moved their portfolios in those banks earmarked for collapse to safety even before closure thereby reducing the liquidity of the collapsed banks tremendously and you can check the records from May-August 2018.

4. Less than 5% of Customers of Fund Management Companies have actually been paid, for Savings and Loans Companies the estimate is around 3% of customers and the Microfinance is hovering around 6%.

5. Commercial banks/Universal banks have the highest number of Customers paid, because of the 50% discounted coupon been redeemed at CBG. Close to 15% have redeemed their 5years Non-tradeable Zero Coupon bonds at CBG at a discount of 50%. Which means they had to forfeit half of their locked-up funds

6. The Receiver is Allegedly Selling off Assets of Collapsed Banks Cheaply way below Market Prices. For Example, it is alleged that a Toyota V8 at the current Market value of over $30,000 was allegedly sold for less than GHC15,000 to Persons close to Government.

So Apart from Cruelly Collapsing these banks, Assets of the banks have been sold cheaply to friends and cronies of the Government.

Other offices have allegedly been taken over by Databank, allegedly using the offices of some of the collapsed banks to conduct private businesses of databank(the finance Minister’s bank)

7. The government has little commitment to pay Customers, In fact, it does NOT even intend to pay them in its second term and that is why a 5year zero-coupon bond was issued to customers of the collapsed banks.

8. Now it is evidently clear that the deputy Minister of Finance did NOT only lie to Ghanaians, but he also deceived Parliament too and must be held for contempt of Parliament or be dragged to the privileges committee if he is a Member of the House.

Mensah Thompson

Executive Director, ASEPA

0542120628

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