The Governor of the Bank of Ghana, Dr Ernest Addison, has said the central bank decided to revoke the licence of Heritage Bank recently because its majority shareholder, Mr Seidu Agongo, failed the “fit and proper person” test, thus, “unsuitable” to own or run a bank in Ghana.
Dr Addison told journalists on Friday, 4 January 2019 at a press conference that: “The bank’s capital appears to have come from sources which are suspicious”.
According to the Governor, “The promoters of Heritage provided evidence to the Bank of Ghana at the time of the application for a banking licence to the effect that an amount totalling GHS 120.6 million was lodged with a local bank.
“The amount of GHS 120 million was transferred to the bank from Agricult (a company wholly-owned by Seidu Agongo, a promoter of Heritage), which funds appear to have been derived from contracts awarded to Mr Agongo by COCOBOD and are currently the basis of criminal prosecution in the High Court of Ghana. Meanwhile, it has come to the notice of the Bank of Ghana that the bank has yet to respond to two High Court orders for disclosures relating to these and other contracts affecting the significant shareholder Mr. Agongo.
“While Mr Agongo claimed that his sources of capital for the bank included proceeds of a USD 19.25 million contract with COCOBOD, Bank of Ghana’s subsequent investigations have shown that there was no such contract between COCOBOD and Mr Agongo. One or more contracts executed, however, existed between COCOBOD and Sarago Limited (“Sarago”). Documents submitted to the Bank of Ghana for licensing of the bank made no mention of the contract between COCOBOD and Sarago nor the fact that Sarago (also a shareholder of the bank) was owned by Mr Agongo”.
Mr Agongo is currently in court with the state over the COCOBOD saga based on which the central bank Governor revoked Heritage Bank’s licence.
The case, in which he and former COCOBOD CEO, Dr Stephen Opuni, are alleged to have fraudulently secured several contracts totalling GHS271 million to supply fertiliser to the Ghana Cocoa Board, is yet to be determined.
In March 2018, the Attorney General charged the two of them with 27 counts of willfully causing financial loss to the state.
It is the contention of the AG that Dr Opuni, during his tenure as COCOBOD CEO (November 2013 to January 2017), breached laid-down procedures in procurement and other laws that led the state to lose GHS271.3 million in the alleged fertiliser scandal and the distribution of substandard fertiliser to cocoa farmers.
The two accused persons have denied any wrongdoing and have pleaded not guilty to all the 27 charges and have each been granted a GHS300,000.00 self-recognisance bail by the court.
Asked by journalists if the action of the central bank was not premature, since the COCOBOD case was still in court, Dr Addison responded thus: “The issue of Heritage Bank, I wanted to get into the law with you, I don’t know if I should, but we don’t need the court’s decision to take the decisions that we have taken. We have to be sure of the sources of capital to license a bank, if we have any doubt, if we feel that it’s suspicious, just on the basis of that, we find that that is not acceptable as capital. We don’t need the court to decide for us whether anybody is fit and proper, just being involved in a case that involves a criminal procedure makes you not fit and proper.