Nordea Capital has issued a statement that seeks to move away from any relationship with William Ato Essien, the beleaguered owner of collapsed bank, Capital Bank. The company, in the statement said, it only acted as an arranger for commercial paper issued by MC Management Services and Brietling Services with Capital Bank as the investor.
It clarified that the role the companies played fall within the authorized business of Nordea Capital as an investment Banking and Asset Management Firm.
A 2014 Bank of Ghana (BoG) Examination and Inspection Report has revealed the level of complicity of shareholders in the defunct UT and Capital Banks, and the central bank’s laxity in its supervisory role.
Two clear years after the finding by Boulders and Advisors, the Banking Supervision Division (BSD) of the Bank of Ghana granted an ‘approval in principle’ for the non-existent investment of GH¢482.4million to be structured into a loan facility to be paid by the four major shareholders over a five-year period.
The complicity of shareholders in defunct Capital Bank and the weak oversight of the Board are at the core of the financial indiscipline, crisis and ultimate collapse of the indigenous bank.
The 2014 Bank of Ghana (BoG) Examination and Inspection Report noted that the major shareholder, William Ato Essien, flouted banking and risk management rules and treated depositors’ funds and public funds as his personal ‘piggy-bank’.
He used depositors’ funds totalling GH¢80million to invest in business ventures such as: Ghana-Ocean Spring Mineral Water; Brictling Services; Gye Nyame Realty Limited; Capital and More Co. Limited; Accent Financial Services and Limited; ESICH Life Assurance Limited; and Capital Africa Group,” the report noted.
In Zimbabwe, depositors and public funds were used in setting up First Capital Plus LLC, Gye Nyame Resources LLC, and Bill Mine LLC. Essien Swiss International Capital Holdings (ESICH) was also set-up in South Africa in a similar fashion.
The report cites Nordea Capital, Commerz Savings and Loans and Sovereign Bank as related companies to Mr. Essien.
Out of the GH¢610million liquidity support received from the BoG by Capital Bank, GH¢27.5million was used for business promotion that was handled by a board member; GH¢23.9million was transferred to IFS; GH¢65million was transferred to Nordea Capital; and GH¢130million was transferred to Alltime Capital.
The liquidity support of GH¢65million transferred to Nordea Capital and the GH¢130million transferred to Alltime Capital was then used to set up a new bank, Sovereign Bank.
The placement of GH¢1340million with Alltime Capital and GH¢65million with Nordea Capital were a round-tripping of the liquidity support from the Bank of Ghana to set up Sovereign Bank.