A DOSSIER on Accent Financial Services Limited from
the Bank of Ghana revealed that most of the company’sinvestments
portfolio had no supporting documents, whilst loans it granted to related
parties were concealed from the Bank of Ghana,
Accent Financial
Services Limited recorded high non-performing loans due to poor underwriting
standards; took to creative accounting practices, thereby misrepresenting its
true financial condition as well as misreporting its true financial position to
the Bank of Ghana.
Accent Financial
Services Limited was incorporated in Ghana on 21st November, 2012 and was
licensed by the Bank of Ghana to commence operations in June 2013.
The institution has
been insolvent since March 2017. The Bank of Ghana has since March 2017 engaged
the Board and Senior Management of the institution on the need to inject
additional capital but that yielded no results.
In addition to the
afore-mentioned factors that led to the revocation of the operating licence by
the central bank, were that the company had a net worth of negative GH¢55.76
million as at end February 2019, in violation of section 28(1) Act 930. Also,
it had a capital adequacy ratio of negative 144.30% as at end February 2019, in
violation of section 29(2) of Act 930.
“The institution
has been facing serious liquidity challenges as it has been unable to meet
customer withdrawal requests since 2017. The Bank of Ghana has received many
complaints from customers regarding the inability of the institution to meet
their withdrawal demands,” the BoG report said, adding that Accent Financial
Service Limited also had corporate governance weaknesses with weak board and
management oversight.
Adom Savings And
Loans Limited
Adom Savings and
Loans Company Limited, a financial services company incorporated under the
Companies Act, 1963 (Act 179) in January 2010, recorded poor earnings due
mainly to high management fees paid to related parties, had poor credit
underwriting standards and weaknesses in risk management function resulting in
high non-performing loans, and was unable to present an accurate and reliable
account of its transactions.
Also, a review of
the institution’s performance in August 2018 revealed that it was insolvent
while its reported capital adequacy ratio and net worth as at May 2019 were
negative.
“Among other
things, the Bank of Ghana’s supervisory assessments revealed that the
institution’s net worth of negative GH¢9.60 million as at end May 2019 violated
section 28(1) of Act 930, and its capital adequacy ratio of negative 126.23% as
at end May 2019 was in violation of Section 29(2) of Act 930.” Also, its
non-performing related party exposures were far in excess of the statutory
limits.
The BoG report
continued that Accent Financial Services consistently breached the minimum cash
reserve ratio requirement since 11th July, 2018 mainly as a result of its
liquidity challenges, while it was also unable to meet withdrawals of
customers.
“Weaknesses in
board and senior management oversight, including the fact that the institution
has been without a substantive Managing Director since September 2018,” it
added.
It was licensed by the Bank of Ghana to operate as a savings and loans company in August 2016 and commenced operations in November 2016.
BY Samuel Boadi
