Attorney-General and Minister for Justice, Dr Dominic Ayine, has withdrawn the state’s legal case against Kwabena Duffuor, a shareholder of defunct uniBank Ghana Limited (uniBank) and owner of HODA Holdings Company Limited (HODA) and seven other accused.

The accused were charged with 68 counts of the following offenses: (i) conspiracy to commit fraudulent breach of trust; (ii) fraudulent breach of trust; (iii) Money laundering; (iv) dishonesty receiving; (v) contravention of the Bank of Ghana Act, 2002 (Act 612); (vi) willfully causing financial loss to the state; (vii) conspiracy to falsify accounts; and (viii) falsification of accounts.

The Attorney-General in a statement, provided an explanation for entering a nolle prosequi in the case of The Republic v. Kwabena Duffour & 7 Others, although the exercise of this prosecutorial discretion requires no explanation under law.

The A-G explained that the central objective of these prosecutions was to ensure accountability for public funds and recover losses occasioned to the state through various alleged acts of financial impropriety.

Per facts of the case, between December 2015 and June 2016, uniBank applied for various liquidity support of GH¢200 million, GH¢350 million, and GH¢450 million from the Bank of Ghana (BoG) out of which only GH¢150 million was paid, leaving an overdue amount of GH¢850 million excluding interest.

While still in default in the repayment of the BoG liquidity support of GH$850 million, uniBank borrowed several amounts through overnight interbank borrowings.

The Office of the Attorney General, in pursuit of the aforementioned objective, established a threshold of 60% recovery of the alleged losses to the state as a condition for reconsidering prosecution in specific cases in collaboration with other relevant state agencies.

The A-G noted that “following prolonged negotiations and engagements, the accused persons in The Republic v. Kwabena Duffour & 7 Others case have met this recovery threshold.”

In light of this, the Attorney-General noted that continuing with the prosecution would not serve any additional public purpose, as significant recoveries were made for the state.

Per the statement, the A-G’s decision does not imply an absence of wrongdoing nor a vindication of any conduct.

“It is a pragmatic step in line with the overarching national interest of recovering State resources. The Honourable Attorney-General remains resolute in his commitment to upholding the rule of law, protecting the public purse, and pursuing justice in all matters of national importance,” the statement added.

Facts

Kwabena Duffuor, the 1st accused person, is a shareholder of uniBank Ghana Limited (uniBank) and the ultimate beneficial owner of HODA Holdings Company Limited (HODA). HODA, the 2nd accused person, is a holding company and the majority shareholder of uniBank.

Johnson Pandit Asiama, the 3rd accused person, was the 2nd Deputy Governor of the Bank of Ghana (BOG) between April 2016 and January 2018. The 4th accused person, Kwabena Duffuor II, formerly a Chief Operating Officer (COO) of uniBank subsequently became the Chief Executive Officer (CEO) of uniBank between June 2017 and March 2018.

The 5th accused person, Ekow Nyarko Dadzie-Dennis, who was a COO of uniBank is a member of the Board of Directors of WAICA Reinsurance Corporation Plc (WAICA-Re), Sierra Leone. The 6th accused person, Elsie Dansoa Kyereh, was an Executive Head of Corporate Banking at uniBank.

The 7th accused person, Jeffrey Amon, was a Senior Relationship Manager of Corporate Banking at uniBank. The 8th accused person, Benjamin Ofori was the Executive Head of Credit Risk at uniBank. The 9th accused person, Kwadwo Opoku Okoh, was a Financial Control Manager of uniBank and is Head of Finance of HODA.

UniBank went into official administration on 20th March 2018 and was placed in receivership on 1st August 2018. KPMG, the Official Administrator, in the course of its duties discovered that about GH¢5.7 billion had become due from shareholders of uniBank as of 20th March 2018.

No security nor proper credit arrangements were made for the payment of the amount, which remains unpaid. The debt of GH¢5.7 billion was made up of two components, namely, a Deferred Expenditure Account (DEA) together with other balances of about GH¢3.7 billion and, secondly, Loans and Advances made up of about GH¢2 billion.

The DEA was a general ledger account created and operated for the benefit of shareholders of uniBank. The GH¢43.7 billion was also made up of a number of transactions of which about GH¢2.4 billion constituted direct payouts for the benefit of shareholders.

Out of the amount of GH¢2.4 billion, the 4th and 5th accused persons acting in concert dishonestly appropriated funds out of customer deposits and borrowings from BOG for the benefit of shareholders through a variety of means including the use of petty cash vouchers and cash pay-in slips amounting to about GH¢613 million.

Out of the amount of GH¢613 million, various payments were dishonestly made to the accounts of related parties of uniBank including the 2nd accused person (HODA), HODA Properties, Numa Logistics, Integrated Properties, Topp Recruitment and Bolton Portfolio without recourse to due process contrary to proper banking practice. Corresponding entries were also dishonestly posted to the DEA.

The 1st and 2nd accused persons between January 2014 and February 2018 dishonestly received over GH¢663,283,917.19 through subsidiaries of the 2nd accused person out of customer deposits with uniBank that were dishonestly transferred and recorded in the DEA.

It was also discovered that in April 2016, an amount of GH¢35million was dishonestly paid from uniBank funds to Ghana Oil Company Limited (GOIL) for the purchase of shares in GOIL for the benefit of Starmount Development Company Limited (Starmount), a related party. The amount of GH¢35 million was also posted to the DEA at the instance of the 4th and 5th accused persons.

Between November 2015 and September 2017, at the instance of the 4th and 5th accused persons, various dishonest payments amounting to GH¢74 million were made by uniBank to fund a commercial printing and label manufacturing company, uniPrecision Printing and Packaging Company Limited (uniPrecision), also a subsidiary of HODA. These payments were charged to the DEA. UniBank failed to recover these funds from uniPrecision.

Between December 2015 and June 2016, uniBank applied for various liquidity support of GH¢200 million, GH¢350 million, and GH¢450 million from BoG, out of which only GH¢150 million was paid leaving an overdue amount of GH¢850 million, excluding interest. Whilst still in default in the repayment of the BoG liquidity support of GH$850 million, uniBank borrowed several amounts through overnight interbank borrowings.

In September, 2016, the 3rd accused person, even though aware that uniBank was in a poor liquidity state and still in default of repayments due BoG contrived a scheme whereby the 3rd accused person gave approval for the disbursement of a GH¢300 million unsecured facility to Universal Merchant Bank Limited (UMB) for the benefit of uniBank without following prescribed mandatory statutory conditions. GH¢150 million of the facility remains unpaid.

On 5th December 2016, uniBank borrowed GH¢400 million from BoG as overnight borrowing in addition to other borrowings from the interbank market. Despite its weak liquidity position, uniBank, at the instance of the 4th and 5th accused persons, dishonestly transferred a total of about GH¢325 million through UMB as payment for 51% ADB shares in the names of Belstar Capital Limited (Belstar), Starmount, SIC Financial Services Limited (SIC-FSL), EDC Investments Limited (EDC), Oscar Yao Doe and Mark Blewunyo Cofie.

The balance of the outstanding GH¢850 million liquidity support from BOG was still due at the time uniBank transferred the amount of GH¢325 million funds to purchase the adb shares which compelled BOG to nullify the purchase of the shares.

The second component of GH¢2 billion due to uniBank by shareholders included 31 fictitious loans amounting to over GH¢1 billion created at the instance of the 4th, 5th, 6th, 7th and 8th accused persons. Investigations disclosed that none of the customers in whose names the fictitious loans were created applied for, received nor were granted any loan facility by the bank.

As a result of the dishonest conduct of the 4th, 5th, 6th, 7th and 8th accused persons, the outstanding balance due to the bank on the DEA was dishonestly excluded from uniBank's assets in its prudential returns to BoG and its annual financial statements thereby misreporting its true state of affairs to the regulatory authorities and users of its financial statements.

The 4th accused person on 6th June 2016 dishonestly authorised the establishment of a Letter of Credit (LC) by uniBank in the sum of GH¢12.5 million for the benefit of uniPrecision for the purchase of equipment. Investigations revealed that no equipment was purchased. Payments in respect of the LC were made by uniBank to Ecobank, Paris. The total amount paid in that transaction was about GH¢13.5 million inclusive of interest.

The 4th, 5th and 9th accused persons, acting in concert between November 2013 and February 2014, dishonestly appropriated the sum of about GH¢9.5 million ostensibly for the purchase of shares in WAICA-Re in the names of Telemedia Communications (Telemedia), Crown Insurance Brokers (Crown Insurance), uniCredit Ghana Limited (uniCredit), HODA, uniBank, uniSecurities Ghana Limited (uniSecurities) and the 1st accused person, Kwabena Duffuor. Investigations disclosed that Telemedia, Crown Insurance, uniCredit, uniSecurities and the 1st accused person held no shares in WAICA-Re.

Background

The accused were arraigned before the High Court, Accra, on 12th February, 2020, for the alleged roles they played leading to the collapse of UniBank, a bank licensed to operate under the Banking and Deposit-taking Act, 2016 (Act 930).

When, in the course of its operations, UniBank began to show signs of distress, the Bank of Ghana stepped in, and in exercise of its powers of supervision over banks and deposit-taking institutions, appointed an official administrator to reorganize the affairs of the bank.

KPMG, an audit firm, was appointed Administrator of Unibank by Bank of Ghana from 20th March 2018 - 31st July 2018. At the end of the Official Administration, the Bank of Ghana revoked the banking licence of UniBank and appointed Nii Amanor Dodoo, a Senior Partner of KPMG, as the Official Receiver of UniBank pursuant to the provisions of Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). The effective date of the appointment was 1st August 2018, that is one day after the mandate of the Official Administrator ended.

At the close of Management Conference on 22nd February, 2021, the prosecution opened its case by calling its first witness (PW1), Nii Amanor Dodoo, the receiver of UniBank. On 26th April, 2021, the appellants raised objection to him testifying and challenged the status of PW1 as a competent witness.

Their objection was based on the fact that being a senior partner of KPMG, the Official Administrator of UniBank, he had taken an active part in the management and operation of UniBank as Official Administrator.

Since one who had acted as Official Administrator was prohibited under 122 (8) of the Act 930 from taking any position as "shareholder, director, key management personnel in a bank", his appointment as receiver was null and void. Consequent upon his appointment as receiver being a nullity, he was not competent to testify in that capacity on any matter concerning the affairs of UniBank.

The High Court overruled the objection on 22nd June, 2021, and the appellants took the interlocutory appeal to Court of Appeal. The Court Appeal affirmed the decision of the trial Court and dismissed the appeal on 17th February, 2022. Appellants filed an appeal to the Supreme Court.