The first prosecution witness in the criminal case against the former Chief Executive Officer (CEO) and owner of the defunct Beige Bank, Mike Nyinaku, has alleged that the bank was turned into a ‘cash-cow’ for the accused, whereby customer funds were siphoned at his will.
Julius Ayivor, a chartered accountant, said the withdrawals were done according to the beck and call of Nyinaku himself and his many companies, including The Beige Group Limited.
The High Court proceedings held at the last sitting on April 3 were largely centred on one of the prosecution’s cases involving a total GH¢141million that was allegedly siphoned from the accounts of 23 customers of the defunct Beige Bank on instructions of the former CEO. The funds were allegedly siphoned to The Beige Group Limited, a company wholly-owned by the accused person.
Evidence
Two customers – Tobinco Pharmaceuticals Limited and Ernest & Barbs Construction Limited – were cited in Mr. Ayivor’s witness statement as examples of the 23 affected customers. The first prosecution witness used the case of Tobinco and Ernest & Barbs to explain to the court how the alleged siphoning was done on the accused person’s instructions.
In the case of Ernest & Barbs, the witness alleged the siphoning of GH¢17million from their account in January 2018 while an amount of GH¢20million was siphoned from Tobinco’s account in March 2018, all to the benefit of the accused person and his company, The Beige Group Limited.
Cross-examination
During cross-examination of the witness, the counsel for Mike Nyinaku, Thaddeus Sory, suggested that evidence provided by the prosecution indicated that customers whose funds were allegedly siphoned from their accounts knew that their funds were being transferred to The Beige Group Limited, and also indeed sanctioned the transfers.
Mr. Sory asked: “As the Receiver who investigated, did you find out if those customers were specifically targetted or there was a special reason why their deposits were subjected to transfers to The Beige Group Limited?”
In response, Mr. Ayivor said: “I do not know if they [the affected customers] were specifically targetted or whether there was a special reason that necessitated the siphoning of their funds. What is apparent from the grand scheme that was perpetrated by the accused person is that once he noted customers had a lot of funds in their account, it became an opportunity for the accused person to oversee the siphoning of those funds to himself and his companies”.
In a rebuttal, Mr. Sory said: “I am putting it to you that the only reason why these customers had their funds transferred to The Beige Group Limited is because they sanctioned those transfers”.
Mr. Ayivor vehemently disagreed with that suggestion, describing it as a blatant untruth.
“First of all, The Beige Group Limited – which is a company limited by liability – is not licenced to take deposits; neither is it licenced to operate the business of banking and fund management. So, there is no way that any of the affected customers would have sanctioned the siphoning of their funds to The Beige Group Limited. The Beige Group Limited is just a holding company with the responsibility of supervising companies owned by the accused person,” he said.
The chartered accountant further explained that The Beige Group Limited had no power and authority to take deposits.
Mr. Sory then asked the witness if he was aware that The Beige Group Limited sourced funds from various sources, including the Beige Bank and from its business, to support the bank’s payment of interest to those customers, to which the witness said he was not aware. “All I know is that The Beige Group Limited, under the supervision of Mike Nyinaku, turned the bank into a cash-cow where funds placed by customers were siphoned to The Beige Group Limited and to the accused person at will.”
Account statement
The counsel for the accused later cited a few instances in the bank account statement of The Beige Group Limited, which had been tendered in evidence, and noted a few instances in which funds were being paid out to some of the affected customers, including Tobinco and Ernest & Barbs.
Mr. Sory, for instance, drew the court’s attention to two transfers of GH¢473,000 each made from The Beige Group’s account, and described theses as “funds transfer from BG to Tobinco Pharmaceuticals Ltd.”.
The counsel, who also tendered through the witness copies of cheques issued by The Beige Group Limited to Ernest & Barbs and and signed by Mike Nyinaku – which cheques cleared on the account of The Beige Group – put it to the witness: “I am putting it to you that your testimony confirms clearly that Tobinco and Ernest & Barbs received payments directly from the Beige Group account, all of which payments represent interest on their investment – which confirms that the customers knew they were dealing with the Beige Group”.
The witness vehemently disagreed with that suggestion, saying: “My Lady, that is not true; and it can never be true. As I stated earlier, all the transfers involving the 23 affected customers were done without their knowledge and express instructions”.
The witness had stated in his witness statement and beginning of the cross-examination that The Beige Group Limited was not a licenced financial institution, and as such any suggestion that it (The Beige Group Limited) made interest payments to any of the affected customers could not be true.
Background
Mike Nyinaku was the former Chief Executive Officer of The Beige Bank Limited, and on 1 August 2018 the Bank of Ghana revoked the banking licence of Beige Bank and placed it in receivership. Mike Nyinaku is standing trial on forty-three (43) counts of stealing, fraudulent breach of trust and money laundering – involving the siphoning of a total GH¢1.2billion from the defunct Beige Bank between 2015 and 2018 – in a case presided over by Justice Afia Serwah Asare-Botwe, a Justice of the Court of Appeal sitting with additional responsibilities as a High Court Judge. He has pleaded not guilty to all charges.
The case has been adjourned to 17 April 2023 at 10am to be held at Financial Court 2 of the High Court.
