Founder of defunct UT Bank, Prince Kofi Amoabeng
The Bank of Ghana, in August 2017, revoked the license of two commercial banks – UT Bank and Capital Bank.
The action was triggered by the inability of the two banks to turn around their negative capital adequacy positions, which lingered on for some time.
According to the Central Bank, UT Bank and Capital Bank were deeply insolvent, meaning that their liabilities exceeded their assets.
This put them in a position not to be able to meet their obligations as and when they fell due.
It averred that despite repeated agreements between the Bank of Ghana and these two commercial banks to implement an action plan to address these significant shortfalls, the owners and managers were unable to increase the capital of the banks to address the insolvency.
Founder of the defunct UT Bank, Capt Prince Kofi Amoabeng (rtd), in his new book has shared the letter he received from the central bank on the revocation of license of his bank.
He stated that prior to the revocation, his outfit had a very cordial relationship with the central bank and that the Bank of Ghana had been very supportive of all their efforts to secure an investor to recapitalise UT Bank.
Amoabeng said he was taken aback when his bank’s license was revoked.
Read the letter below;
Revocation of Licence/ Purchase and Assumption UT Bank Ghana Limited
On the 14th of August 2017, the Bank of Ghana revoked the licence of UT Bank, appointed CB as operators of the bank and PWC as receivers.
Prior to this date, we had a very cordial relationship and BOG had been very supportive of all our efforts to secure an investor to recapitalize UT Bank. We are therefore shocked and devastated by the Bank of Ghana’s actions to revoke the licence of UT Bank and the process undertaken to hand over its operations to GCB Bank Ltd.
Our last meeting between your good self, your two deputies, head of Banking Supervision and the underined was in June 2017. At this meeting we discussed the interest of an investor, ACE Finance Ltd., who had presented us with an offer to fully capitalize UT Bank and further, as a goodwill gesture deposited GHCLO million into an account with Bank of Ghana pending full evaluation of their offer by BOG. We concluded the meeting on a very good note with your office requesting us to stand by for a directive from 80G to call an Emergency General Meeting of our shareholders should their offer be accepted.
Astonishingly, BOG wrote to only the investor- ACE Finance Ltd. on the 7″ August 2017 (a week to the 1* August revocation) rejecting their offer. Management and Directors of UT Bank were not copied on this rejection letter. As a result of your sudden rejection and revocation of UT Bank’s licence, other serious investors in UT Bank and UT Holdings were scared away.
We are further at a loss as to the process of the takeover of UT Bank. GCB staff and the Police were at our office at about 06:00hrs pulling down UT Bank signage. UT Bank staff were barred from entering their offices and UT Bank was closed to reopen as GCB Bank by 13:00hrs. Meanwhile the Chairman of the UT Bank was contacted by phone by the Head of Banking Supervision at 07:00hrs and a formal letter from BOG on the revocation was delivered to us at 14:00hrs.
Other actions of BOG that we find difficult to comprehend were the subsequent closure of accounts of UT Holdings and all its subsidiaries, and personal accounts of all directors of UT Bank.
These actions have impacted extremely negatively on the UT Brand and we are suffering from their effects such as de-listing of UT Bank from the Ghana Stock Exchange, a run on the group by its debtors, and desertion of customers of Holdings and its subsidiaries.
Directors: J. Nsonamoah, P. K. Amoabeng, Capt (rtd) Budu Koomson, Justice Kusi – MinkahPremo, Philippe E. Ayivor, Martyn Mensan
SA/AE
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