A witness in the trial of former Chief Executive Officer (CEO) of defunct Beige Bank, Mike Nyinaku, has said that the accused supervised the issuance of misleading investment certificates to unsuspecting customers.
The witness first prosecution witness, Julius Ayivor, who is a chartered accountant with auditing and advisory firm, KPMG, told the Accra High Court that the customers were made to believe that they were investing with the bank when it was with the Beige Capital Asset Management (BCAM). Mr. Nyinaku owns BCAM.
During his cross examination, Mr. Ayivor added that unknown to the customers, Nyinaku instructed monies the customers had placed with Beige Bank to be siphoned out to a sister company, , a firm owned by Nyinaku.
Counsel for the accused, Thaddeus Sory who was subjecting the evidence given by Mr. Ayivor to scrutiny, argued that funds that had been placed with the bank by its customers formed part of the bank’s property. According to him, the funds were not the property of shareholders or customers who deposited those funds with the bank.
However, the witness, in his response, explained that even though the funds placed by customers with the defunct Beige Bank became the property of the bank, those funds equally stood to the credit of those customers to whom the bank had an obligation to pay back the funds whenever they requested.
Mr. Ayivor further stated that siphoning those funds from the accounts of the customers into the account of BCAM, also held with Beige Bank on the instructions of Nyinaku, without the instructions or knowledge of the affected customers, meant that the affected customers only had access to the balance that remained on their accounts with the bank after the funds had been siphoned.
Mr. Ayivor added that once the funds got into the account of BCAM, they stood to the credit of BCAM and not the customers any longer.
This, he said, explained why BCAM, together with Nyinaku, had access to those funds totalling GH¢448 million, most of which were appropriated, leaving a balance of GH¢539,515 on BCAM’s account as of August 1, 2018, when the bank’s licence was revoked by the Bank of Ghana.
While using about 12 of the investment certificates tendered through the state issued to one Emmanuel Richard Ofori in connection with a GH¢4million investment, Mr. Ayivor had previously alleged that that those “BEIGE” certificates were intentionally issued to the affected customers to “mislead” them into thinking that the funds remained placed with the Beige Bank in fixed deposits while the funds had actually been moved from the customer’s account with Beige Bank to BCAM’s account.
In another question, Mr. Sory claimed that Bidvest Microfinance Limited, one of the over 10,000 customers whose funds had allegedly been siphoned to BCAM without their knowledge and instructions had fully been repaid their deposit of GH¢3 million, which Mr. Ayivor alleged had been siphoned out of their account before Beige Bank’s licence was withdrawn.
In his response, Mr. Ayivor said: “My lady, it is true that Bidvest received a credit of GH¢3.1 million on April 25, 2018 which is shown on Exhibit H15 but that credit was paid out of the fictitious account opened in the name of First Africa Savings and Loans, which is exhibit K”.
Mr. Ayivor further explained that the GH¢3.1 million paid to Bidvest, was made out of the over GH¢320 million customer funds that had been siphoned on the instructions of Mike Nyinaku, into a fictitious current account opened in the name of First Africa Savings and Loans FASL, without the knowledge of the Board and management of FASL.
Mr. Ayivor further described the “scheme” under which Bidvest was paid as “robbing Peter to pay Paul”.
During cross-examination of Mr. Ayivor on Monday, March 20, 2023, Mr. Sory tendered a letter dated January 11, 2019 from the Receiver of Beige Bank in which the Receiver demanded from Nyinaku repayment of funds siphoned out of Beige Bank for his own benefit and to the benefit of companies owned by him.
The letter listed, in broad categories, the amounts involved, totalling about GH¢1.2 billion.
Mr. Sory sought to argue that because the Receiver made demands on Nyinaku for the repayment of the amounts allegedly siphoned out for the benefit of Nyinaku and his companies, the amounts demanded qualified as debts and nothing else.
Referring to the January 11 2019 letter, Mr. Sory asked, “in the letter, the Receiver informs Mike Nyinaku that he was formally demanding repayment of all those funds that you mentioned in paragraph 25 of your witness statement” to which Mr. Ayivor responded “that is so, and that is because the Receiver’s mandate as prescribed under Act 930 includes recovering debts owed to the bank and that could be made up of those legitimately advanced by the bank and those illegitimately siphoned out of the bank, so this paragraph is just in fulfillment of that mandate”.
In a follow up, Mr. Sory asked, “and you are aware that under Act 930, it is not illegal for a bank to expose itself to related parties?” to which Mr. Ayivor responded “My Lady, I am aware that a bank can be exposed to related parties to some extent. There is a cap that is allowed under the Act”.
Mr. Ayivor further added that there should also be an agreement between the bank and the said related parties as well as a board approval if those transactions were to qualify as regular.
He, however, added that that did not happen in the case of Beige Bank. Instead, he said monies were siphoned at will from the bank to Mike Nyinaku and companies owned by him on the blind side of the Board of Directors and those monies have to date not been repaid to the bank.
Nyinaku has been charged at the court, presided over by Justice Afia Serwah Asare-Botwe, for allegedly stealing about GH$1.3 billion of depositors’ funds from the bank. He has pleaded not guilty to all 43 charges of stealing, fraudulent breach of trust and money laundering and is currently on bail.
