Business News of Wednesday, 11 April 2018
The Economic and Organized Crime Office (EOCO) yesterday detained Rev Fitzgerald Odonkor, former CEO of the defunct Capital Bank, in connection with the bank’s collapse.
He was invited by the financial crime investigation outfit of EOCO alongside some two other directors of the bank, Pastor Mensa Otabil, Founder of the International Central Gospel Church and William Ato Essien, founder of Capital Bank, for interrogation, but he was the only one who was detained.
The bank was said to have engaged in dodgy investments with the directors alleged to have embezzled depositors’ funds, leading to its insolvency. There are other businesses with Ato Essien having substantial interests going the way of Capital Bank.
There are calls for the arrest of directors of distressed banks to serve as deterrent to others.
Even though reasons for Rev Odonkor’s detention were not immediately clear, he was granted bail after sometime.
It would be recalled that in August last year, GCB Bank had to take over Capital Bank and UT Bank after the two financial institutions had virtually collapsed as a result of their inability to improve their capital adequacy ratio (CAR) which dipped into the negative position, leaving them with more liabilities over their assets.
Former directors of the two institutions were invited by EOCO in late March this year for questioning after a report was submitted to the central bank on instances that culminated in the banks’ collapse.
The central bank has indicated that it would hold responsible any shareholders, directors and key management personnel who would be found to have played any roles leading to the collapse of the two indigenous banks.
Sometime back, a former CEO of Capital Bank, John Kofi Mensah, dropped a hint that the bank was struggling particularly with capitalization issues and had to be attended to but his warning was neglected.
“This has been the bane of the bank for some time now, that while management is embarking on a desperate and aggressive deposit mobilization to shore up liquidity to cover holes in the balance sheet, it is resulting in increased interest expense and general costs to us. This is detrimental to our profitability drive and the same is unsustainable.”
He also cited increased interest expenses and general costs of doing business as a chief obstacle.