A recent report published by the Bank of Ghana has revealed further details regarding irregularities with microfinance companies and savings and loans institutions, with new information indicating that most of these companies diverted funds into other ventures – thereby leading to their insolvency.
A collaborative effort by the Joint Receivers, Bank of Ghana and Economic and Organised Crime Office (EOCO) showed that there was a mismatch in the assets and liabilities reported by the defunct 347 microfinance companies and 23 savings and loans and finance houses.
The Receiver in collaboration with EOCO has so far identified 100 landed properties for further investigation to ascertain their ownership status. These comprise 68 landed properties relating to five microfinance companies, and 32 relating to nine savings & loans companies.
Out of these, 88 of the assets have been frozen.
Approximately GH¢1.09billion was uncovered among eight Savings & Loans companies related party transactions. Microfinance recorded the highest amount of related party transactions, with 42 percent of its loans falling into this category.
According the report, untraceable investments accounted for GH¢116.7million of such transactions.
“We are in the process of transmitting a formal request through the BoG for the EOCO to trace these non-operational institutions and assist with recovery of the funds,” the Receiver said in the report.
All efforts are being made to prosecute the offenders and retrieve as much as possible from the defunct financial institutions, the BoG assures.
According to the report, the purpose of obtaining freezing orders is for the EOCO and Receiver to: “Ascertain the ownership status of the properties; ascertain whether the properties were acquired with resources of the defunct institutions; obtain all relevant documents for the said properties; conduct searches at the Lands Commission to aid potential transfer of these assets to the Receiver; and to prevent owners from dissipating these assets before the Receiver starts the realisation process”.
