Inst. Of Bankers Must Speak On ‘Selective’ Cleaning In Banking Sector – Lotsu

Enyo Lotsu, Development Consultant.

A development consultant, Enyo Lotsu has bemoaned what he describes as a  ‘selective’ clean-up exercise in the banking sector by the central bank led by its governor, Dr Ernest Addison.

He believes some of the local banks whose licenses were revoked by the regulator could have been supported with funds and monitored to ensure that they delivered.

Mr Lotsu’s comments follow the collapse of  Heritage Bank and Premium Bank recently, that has raised eye brows and sparked controversies in the country.

“Taking back the license of Heritage, to me was not fair especially when the bank was not in distress. How can you revoke then bank’s license simply because its majority share holder is standing trial. The Institute of Bankers must speak up on this issue because it looks like some of the banks were targeted,” Mr Lotsu told Mugabe Maase, host of Inside Politics on Radio XYZ 93.1.

To him, the way the Bank of Ghana revoked the licenses of some local banks in recent times in the name of cleaning the financial smacks of unfairness.


Since August 2017, nine (9) local banks have folded up. They include The Royal Bank, former Finance Minister Dr. Kwabena Duffour’s uniBank, The Beige Bank,  The Construction Bank, Sovereign Bank, UT Bank, and Capital Bank, which was chaired by Pastor Mensa Otabil.

Dr Ernest Addison, Governor of the Bank of Ghana.

While some of them were accused using suspicious means and capital to set up, others were also found to have been mismanaged by their shareholders.

However, the reasons given by the regulator for the revocation of some of the licenses have however been contested by some financial analysts.

Heritage Bank

In the case of Heritage Bank, the BoG stated the source of funds of the majority shareholder of the bank, Alhaji Seidu Agongo, a known NDC business man was questionable.

The regulator said while Mr. Agongo claimed that his sources of capital for the bank included proceeds of a USD 19.25m contract with COCOBOD, its investigations showed that there was no such contract between COCOBOD and Mr. Agongo.

Mr Agongo is standing trial on 27 charges including bribery and causing financial loss to the state after the state said his company Agricult did not have the capacity to provide fertilisers when it won contracts valued at 217 million.

One of the reasons the Heritage Bank was shut down, according to the regulator, “failed to meet the ¢400 million capital required as of 31st December 2018.”

The ex-board of Heritage Bank, Dr. Botchwey, however issued a statement describing the Central Bank’s allegations as “complete falsehoods” and “inaccuracies”.

A statement from the board of directors  of the defunct bank said : “We find it puzzling that the Bank of Ghana should now be disputing the existence of a contract between HBL’s main shareholder and COCOBOD, when the bank, as part of its due diligence ahead of the granting of HBL’s provisional banking licence, had requested and received confirmation from COCOBOD of the existence of the contractual arrangements between COCOBOD and the said shareholder.”

The Directors stated on record that “Heritage Bank NEVER RECEIVED, nor is the Board aware of any order from the High Court (or any other court for that matter) for disclosures relating to any contract involving Mr Seidu Agongo,” adding  “In any case, we are unable to fathom why the High Court would order Heritage Bank to make disclosures in respect of a contract that it is not a party to or a custodian of.”

“Heritage Bank was by the Bank of Ghana’s own admission, a solvent bank. It NEVER received liquidity support from the Bank of Ghana. Its corporate governance record had never been impugned by the Bank of Ghana. We believe we have been done a grave injustice and a terrible precedent set that does not bode well for the future. We have dealt herein only with matters affecting the Board’s responsibilities that needed to be clarified to set the record straight, and this, without prejudice to whatever legal options the shareholders may wish to avail themselves of in order to get justice for the even greater harm done to them,” the statement clarified.


Source: Ghana/