Unibank Demands Fair Hearing

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From Bank Of Ghana and Government

The central bank, appears to be playing games with the shareholder of uniBank Ghana Limited, refusing them attempt to recapitalize the bank to address its solvency and liquidity challenges.

The shareholders insist, they have the wherewithal to make the bank work again and be profitable, but the Bank of Ghana (BoG), appears not ready to hear them, leaving them apprehensively questioning the motives of public servants at the bank.

The Herald learnt that, the government of Ghana, owes uniBank about US$1 billion, while Belstar Capital Limited, has US$800 million worth of shares in the state-owned Agric Development Bank (Bank).

 With a fair hearing, the shareholders believe, these colossal amounts put together, will revive uniBank, make it profitable and keep thousands of Ghanaian workers in secured jobs, and the shareholders are ready to meet up with officials of the Central bank and other government officials for a fruitful discussion on the way forward.

But it’s unclear why and when this fair hearing will come, however, Dr. Kwabena Duffour, a shareholder of uniBank Ghana Limited, has, on behalf of the shareholders of the bank, reaffirmed their commitment to recapitalise the financial institution.

“We are also ready to progress discussions on the appropriate structure to handle and leverage the assets of the bank registered with the name of the holder, House of Duffuor Assets (HODA)”, a letter signed by  Dr. Duffour in response to an earlier one written by KPMG said.

In response to the KPMG letter the shareholders, led by Dr Duffour, affirmed their readiness to accept one of the three strategic options to save the bank, as presented by the official administrator (OA) of the bank, KPMG, to the government.

According to the Daily Graphic newspaper, the letter from the KPMG, who were appointed the official administrator by the Bank of Ghana (BoG) put the total deficit of uniBank at 4.9 billion.

The three options are entitled, ‘Good Banks/Bad Banks’, ‘Recapitalisation by existing shareholders with or without new shareholders’ and ‘Recapitalisation by new shareholders’.

The BoG, effective March 20 this year, appointed KPMG as OA of UniBank to assume managerial control of the bank.

The powers, functions and responsibilities of the shareholders, directors and key management were effectively suspended with the appointment of the OA.

Prior to the shareholders forwarding this document to OA, KPMG informed the existing shareholders that there existed a gap of GH¢4.9 billion required to address both insolvency and liquidity challenges of the bank.

On July 12, 2018, Dr Duffour, who is a former Minister of Finance, former Governor of the BoG and a shareholder of uniBank, signed the letter to KPMG expressing his and the shareholders’ commitment to re-capitalise the uniBank.

The shareholders provided evidence of the payment of the first tranche of USD$200 million .

He also indicated that “shareholders remain committed to injecting another tranche of GH¢1 billion by the end of September,” this year.

In the letter, Dr Duffour, also mentioned that the uniBank “retains beneficial ownership of the assets registered in the name of HODA Properties”.

He said the assets “totalling GH¢4.4 billion, shall be warehoused in a trust to be held for the bank and appropriately leveraged to raise and inject funding into the bank”.

The shareholders also indicated their commitment to provide funds amounting to GH¢2.7 billion and assets worth GH¢4.4 billion totalling GH¢7.1 billion, far above the GH¢4.9 billion gap indicated by KPMG.

Last Friday, a list of properties belonging to the HODA Group was posted on some social media platforms, where it was alleged that those properties had been confiscated. But sources close to the shareholder denied knowledge of such properties and their alleged confiscation.

“We know our assets and their values,” the source said.

“The shareholders are committing these funds and assets to ensure that this will result in a well-capitalised, liquid and solvent bank and believe the official administrator will come up with a model in achieving this objective,” the letter said.

Dr Duffour, also assured the OA that the shareholders “intend to engage a first class international bank as a strategic partner of the bank” saying the strategic partner will play a major role in the future management of the bank”.

“It is the utmost desire of the shareholders to work in close collaboration with the official administrator by providing the necessary funding and support that will protect the depositor-interest and ensure the future prosperity of the bank,” the letter affirmed.

Belstar Capital Limited has also rejected claims of any wrongdoing in its purchase of shares in adb bank.

A statement from the company said claims suggesting that it acquired adb’s Initial Public Offering (IPO) using Bank of Ghana’s (BoG) emergency liquidity support obtained by uniBank and given to BELSTAR’s consortium in the form of a loan are “untrue.”

The Central Bank on Monday annulled the acquisition of shares in adb Bank held by four investors – Belstar capital, Starmount Development Company Limited, SIC Financial Services and EDC Investments Limited.

According to the BoG, the decision amongst others equally makes it impossible for them to carry out any voting rights as well as reduce the effectiveness of the directors appointed by the said investors.

This meant that, Belstar Capital Limited (Belstar), Starmount Development Company Limited (Starmount), SIC-Financial Services Limited (SIC-FSL) and EDC Investments Limited (EDC) are no longer shareholders of adb.

The BoG said, “Belstar and Starmount are not fit and proper persons and cannot permit them to continue to hold shares acquired directly or indirectly in adb.”

The four investors owned 51 percent of adb, which was listed on the Ghana Stock Exchange (GSE) in December 2016.

Bank of Ghana accused Belstar and Starmount of acquiring adb’s shares “with funds obtained from uniBank Ghana Limited (currently in official administration) using emergency liquidity support obtained by uniBank Ghana Limited from the Bank of Ghana in questionable circumstances.”

BoG also insisted that “the liquidity funds obtained by uniBank were improperly and unlawfully on-lent to Belstar and Starmount to acquire shares (including shares held by the Financial Investment Trust on behalf of the Bank of Ghana) in ADB’s IPO,” hence its action.

But BELSTAR in its statement argued that at the time the IPO was being bought, the amount of fund available to uniBank exceeded the amount of money it (uniBank) loaned BELSTAR with.

“Whilst information available to BELSTAR confirms owing to a default in loan repayments to uniBank by key government-related entities, the bank had sought emergency liquidity support from BoG. The quantum of depositor’s funds available to uniBank at the time of the IPO far exceeded the amount of money loaned to BELSTAR to acquire the shares in ADB.”

“As borrowers, BELSTAR will not know the source of the money offered, but given what we know to be the state of affairs of the IPO, uniBank or any bank would rather lend the cheaper depositors fund of which they held 3 billion cedis as opposed to the emergency liquidity support of nearly 800 million cedis. We believe that the BoG statement is incorrect and regrettable,” the statement from BELSTAR added.

BELSTAR also denied any wrongdoing in acquiring majority of ADB shares.

“BELSTAR and its consortium are reputable business entities and are led by credible actors with years of experience in money market and financial transactions. We wish to say that we will take steps to correct the erroneous impression that the BoG has put out and use the appropriate channel to restore our business interest to encourage other private sector players to believe in the free market principles,” the statement added.

uniBank is currently being run by private audit firm KPMG Ghana following a directive by the BoG.

This was after the BoG announced it has taken over the bank to prevent it from collapsing.

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