Mr Reindorf Twumasi Ankrah, lawyer for some companies affiliated to businessman Ibrahim Mahama, has said media reports claiming his client’s businesses owed now-defunct UT Bank GHS302 million, for which reason the erstwhile management of the bank tried meeting then-president John Mahama, over his brother’s indebtedness – which, according to an investigative report commissioned by the Bank of Ghana, played a role in the eventual collapse of the local bank – has been “skewed” or “misrepresented”, thus, must be “dismissed”.
The companies involved are Dzata Cement, Holman Brothers Ltd., MBG Ltd.; and Engineers and Planners.
Per the financial autopsy report, the constant defaulting by the four companies to pay the loan, which UT Bank had advanced to them after having implored the Bank of Ghana to waive its rules which limit the amount of funds any bank could advance to clients, strained the financial institution and its shareholders.
On 20 May 2016, the management of the now-defunct bank convened an emergency meeting over how to recover the loans advanced to the “politically-exposed person” – by dint of his brother being the president of Ghana at the time.
According to Minutes of that meeting, the report quoted a Board member of the now-defunct bank, saying they were disappointed that Mr “[Ibrahim Mahama] had made no effort to honour any of the assurances he gave when he met them on 29 March 2016.”
The Board, the report said, decided to pile up pressure on Mr Mahama and his companies to honour his promises, since writing off the debt meant killing the bank.
The Board decided to have its then-chairman, Mr. P.K Amoabeng, meet President John Mahama, his brother Ibrahim and a deputy Finance Minister “to discuss the way forward.”
At a different meeting arranged between the Board and Mr Ibrahim Mahama, the former president’s brother rather sent a representative in the person of Mr. Adi-Ayitevi.
The Board, according to the report, “felt slighted and disrespected by his actions” and “questioned his credibility as a businessman.”
Despite the disappointed, the Board scheduled another emergency meeting for 3 June 2016, according to the report, at which it was willing to discuss the issue with Mr Ibrahim Mahama, since the bank intended getting its money back before the December 2016 polls.
It was at that meeting – the third – that the businessman assured the Board he was “making every effort to pay the amounts outstanding from related companies”, as far as the non-performing loans were concerned.
The loans were still not paid. Thirteen months after that meeting, the BoG revoked UT Bank’s licence after deeming the bank as having irredeemable liquidity crisis.
In a statement responding to the autopsy report, however, Mr Twumasi Ankrah said: “The sum of money put out there as the amount owed by companies ‘owned’ by Ibrahim Mahama is not accurate, and not a reflection of the facts and documents”.
According to him, “Over a period of time, a group of companies with a company purpose and vision, conceived the idea of jointly establishing a cement factory in Ghana and accordingly pulled resources together to actualise this vision”, adding that: “Pursuant to the vision, Dzata Cement Limited put together a proposal for funding and sent them to a number of banks for financial support”.
UT Bank, he said, “after a thorough due diligence on the companies, agreed to offer financial support to Dzata Cement Limited on terms”.
Mr Twumasi Ankrah explained that: “The outlining agreement, which culminated in UT Bank offering financial assistances was that: it will provide liquidity support to Dzata Cement until the factory commences operations and starts selling its cement.
“The agreements was that all payments or proceeds from the sale of cement will be paid directly into an account owned and operated by UT Bank
“Indeed, it was agreed by the parties that UT Bank will have a branch on the premises of the factory which will serve as a pay point for all products purchased by customers.
“The projected revenue per day from the sale of cement was a minimum of GHS1,000,000 and with this projection, Dzata would have paid off the loan with the interest in less than five years.
“It was agreed that UT Bank will finance the cement factory till it becomes operational but this unfortunately could not happen due to the revocation of its licence last year. At the time the bank’s licence was revoked, the records will show that the project was about 80% complete”.
He continued: “Due to the unexpected revocation of the bank’s licence, Dzata had to resort to other financiers for support to complete the project. In February 2018, the government of Ghana gave the cement company clearance to import 1.2 million metric tonnes of bulk cement for re-bagging based on evidence of installed bagging plant.
“As stated earlier, the loans advanced to Dzata cement was to be repaid from our proceeds of the sale of cement. Clearly at the time the licence of the bank was revoked, Dzata could not have been in a position of default because the factory was not operational then.
“It must also be noted that Mr Ibrahim Mahama did not contribute in any way towards the collapse of UT Bank. The evidence available to the bank will show clearly that the loans taken by Dzata Cement were over-collateralised.
“The report purportedly making the rounds in the media may have been skewed or misrepresented the facts, and, therefore, should be dismissed”.