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See all the GHC3.7bn ‘suspicious transactions’ of uniBank

Accounting and auditing firm, KPMG, has, in its 278-page report on the financial health of now-defunct uniBank, stated that the local bank was enmeshed in “suspicious transactions” to the tune of GHS3.7 billion with withdrawals from a particular account called ‘Other Assets’ by shareholders and their related parties, hitting GHS10.8 billion in value.

The Bank of Ghana recently fused uniBank together with four other struggling local banks: The Beige Bank, The Royal Bank, The Construction Bank and Sovereign Bank, to form the Consolidated Bank Ghana Limited.

uniBank has criticised the central bank for not hearing its side of issues and also refusing to give shareholders copies of the KPMG report.

The defunct bank has also accused KPMG of conflict of interest, since it acted as the Official Administrator and later became the Receiver of same.

Below are the full details of what the KPMG report describes as “suspicious transactions” of the now-defunct bank:

GHS3.7billion is the current net balance (pre-impairment) in the Other Assets account. It is worth noting that the total debits to this account were GHS10.8 billion. This represents the value of advances to shareholders under unusual credit terms. There are also GHS0.6billion additional amounts reclassified to Loans and Advances from Other Assets, under unusual circumstances.

Data Capture Transactions

• Management used the Data Capture (DC) module of the T24 application to sometimes post credits not backed by value to individual accounts. These “credits” were subsequently applied as follows:

• Repayment of loans and advances totalling GHS473.2 million

• Transfers to other entities totalling GHS152.4 million

• Purchases of fixed deposits in the Bank totalling GHS89 million

• Examples include transactions (net) in the following accounts: Numa Logistics (GHS438.5million), HODA Holdings (GHS168.1million), UNISECURITIES GH LTD-CALL A-CGH¢(GHS89.7 million), YAW ADDO DEVELOPMENTS LIMITED (GHS87 million).

The bona fide commercial basis for these transactions is yet to be established.

Shares Purchased in ADB

• Included in the Bank’s BoG cedi accounts were some transfers made to UMB Bank in favour of various entities and individuals between 5 and 6 December 2016 with a total value of GHS324 million for use by the beneficiaries to purchase shares in Agricultural Development Bank (ADB). These transfers were recorded in the advances to shareholders account as “ADB share purchase”.

• Funding for this transaction was from a GHS400 million transfer credited to the Bank’s BoG cedi account by BoG, on the same day the transfer to UMB was made.

Off-balance Sheet Transactions

• A number of guarantees, which were either solely approved by the CEO of the Bank or jointly with other officials, were omitted from the Bank’s list of guarantees provided by the Risk Department. Most of the beneficiary entities are related or connected parties.

• The CEO, Dr Kwabena Duffuor II, who is also the Board Chairman of uniPrecision solely approved letters of credit (not collaterised) of $12 million and $4.2 million in favour of uniPrecision and Alban Logistics, respectively, both related entities.

Sale and lease back arrangements at book values of properties

• StarLife entered into sale and lease bank arrangements with UniBank for four (4) properties in Kokomlemle, Tema, Techiman and Tamale and paid the Bank the book values of those assets instead of their fair or market values. These properties have been leased to uniBank and rentals at commercial rates are charged and paid.

Diverted AfriExim $25 million facility meant for LHS and BOST

• The Bank arranged $25 million refinancing facility with African Export–Import Bank (AfrExim) for on-lending to LHS and Bulk Oil Storage Transportation (BOST).

• The Bank utilised the facility arranged for its own purposes and not as indicated in the facility agreement and the balance remains unpaid as of 31 May 2017.


Deferred Expenditure

• The Bank deferred the recognition of some significant expenses incurred in prior years and are amortising these expenses over a number of years.

• This was done to enable the Bank present positive financial performance in the periods the expenses were incurred.

• The total unamortised balance of these expenses as at 20 March 2018 was approximately GHS165 million.

Progress Savings and Loans Limited’s Fixed Deposit

• The Bank booked fixed deposit of GHS12 million in favour of Progress Savings and Loans through the account of Apex Capital Partners Limited. This fixed deposit was not cash-backed and was debited to shareholder advances (Deferred Expenditure-Interest Related) ledger account with associated interest charge.

• Progress Savings & Loans is 100% owned by Apex Capital Partners and Apex Capital Partners is owned principally by Mr Bernard Owusu Twumasi.

Assignment of NonExistent investment of GH¢25 million to Progress Savings and Loans

• uniBank assigned an investment of GHS25 million purportedly owned by uniSecurities Limited (a related party) to Progress Savings and Loans. Based on this, Progress Savings and Loans gave a loan to uniSecurities. Review of uniBank Fixed deposit listings showed that uniSecurities did not have the investment of GHS25 million.

• The letter of assignment from uniBank was signed by the Chief Operating Officer, Mr Ekow Dennis and the company secretary Mrs Sylvia Archer. The assignment was renewed and signed by the COO and the Head of Corporate (Mrs Elsie Dansoa Kyereh).

Unsupported Credits of GHS25 million to Apex Capital Partners Limited Account

• uniBank credited the account (ending with 5131) of Apex Capital Partners with GHS25 million (GHS12 million and GHS13 million) on 31 December 2015 using internal vouchers.

• The account credited was opened on 29 December 2015, two days before the credits. The Relationship Manager, Mr Jerry Afful in an email correspondence described the account as ‘…a new account for special operations’.

• The total amount of GHS25 million credited to Apex Capital Partners account was moved to HODA Properties Limited on the same day

• In response to a letter from the Official Administrator seeking information on the deposits, Apex Capital Partners stated in their letter (dated 27 June 2018) that they do not have a bank account with the transaction stated in the request.

Misrepresentations to BoG

• The Bank misrepresented its financial position as at 31 December 2017 in the BSD report submitted to the BoG.

– Loans and advances were overstated by approximately GHS1.3 billion – Other assets were understated by approximately GHS3.8 billion – Customer deposits balance was understated by approximately GHS2.3 billion.

Related Party Properties

– Various properties paid for by the Bank and recorded in the Bank’s fixed assets register under Capital Work In Progress (CWIP) amounting to GHS28.2 million were noted as belonging to HODA, Bolton Portfolio Limited, Alban Logistics and StarLife Assurance Company.

– For example, the Bank paid GHS11,812,800 ($5,136,000) in November 2013 for the acquisition of Meridian House, a property in Accra. This property was later purported to have been sold to StarLife Assurance Company through Kwabena Basoah (a vendor) under a deed of assignment between StarLife Assurance Company and uniBank (Ghana) Limited. StarLife indicated in the deed of assignment that ‘the vendor” had requested StarLife to pay $6.3 million to uniBank for this transaction. StarLife, however, indicated that it paid $1 million with an offer to transfer two parcels of land to uniBank in exchange for the remaining balance of $5.3 million. We have not been able to confirm payment of the $1million to UniBank as the payment sighted was to Dakmak Adel Mustafa.

Payment of facilitation fees

– Facilitation fees (business promotion expenses), calculated as a percentage of some fixed deposits placed with the Bank, were allegedly paid by the Bank to various unnamed officials of the institutions these amounts were collected from. The percentages ranged from 0.35% to 10% on the amounts placed. The total amount paid and recorded between January 2018 and 20 March 2018, which was charged to interest expense, was GHC20.76 million.



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