Former CEO of Capital Bank, William Ato Essien, has been sentenced to 15 years in prison for his role in misappropriating funds from the Bank of Ghana’s liquidity support meant to stabilize the bank.
This verdict marks the first major sentencing related to the banking sector clean-up in Ghana, signaling a significant development in the ongoing efforts to address financial sector irregularities.
Here’s an overview of the crimes and the legal process that led to this sentencing:
The Crimes:
- William Ato Essien was the majority shareholder of Capital Bank, which received substantial liquidity support from the Bank of Ghana between June 2015 and August 2017, totaling GHC620 million. The support was intended to boost the bank’s capital adequacy ratio and assist in servicing its debt obligations.
- Essien diverted portions of the liquidity support to various entities, including All Time Capital Limited, MC Management Services, Pronto Construction and Supplies Limited, and Nordea Capital Limited, among others.
- He used these diverted funds to represent as the initial capital of Sovereign Bank, a move aimed at covering up the diversion.
- Essien appropriated a total of GHC27.5 million from the liquidity support for personal use.
- He also transferred GHC100 million to a Capital Bank account held by the Managing Director of Maripoma Enterprise Limited, Hardwick Limited, and Volta Impex Enterprise Limited, companies he established to receive the funds. The sum was intended for the purchase of 30% shares in Capital Bank.
- These transactions were part of a larger scheme to move funds through various entities and cover up the irregularities.
The Legal Process:
- In December 2022, during a critical phase of the trial, William Ato Essien admitted to the charges of stealing and money laundering. This admission came shortly before the court’s judgment.
- He pleaded guilty and offered to refund GHC90 million to the state. GHC30 million was paid upfront, with a commitment to repay the remaining GHC60 million in three installments of GHC20 million each. The court stipulated that the first GHC20 million should be paid by the end of April 2023. If this payment was not made, the entire GHC60 million became due, or the court could impose a custodial sentence.
- This arrangement was governed by Section 35 of the Courts Act 1993 (ACT 459). The section allows an individual charged with an offense causing economic loss or harm to the state to admit to the offense and offer compensation for the loss. If the offer is satisfactory to the prosecution, the court can accept a guilty plea and convict the accused.
The Verdict:
- William Ato Essien was sentenced to 15 years in prison following his failure to fulfill the agreed-upon terms of refunding the state’s funds. The court imposed this sentence under Section 35 of ACT 459, as the accused could not meet the payment deadline.
Background:
- Capital Bank was one of the banks affected by the Bank of Ghana’s financial sector reforms due to insolvency. The bank’s inability to meet capital adequacy and liquidity requirements led to the revocation of its license.
- Ato Essien maintained that Capital Bank was in good condition, alleging that the Finance Minister, Ken Ofori Atta, had sought to buy the bank in 2016. These allegations were denied by the Finance Minister and his associates.
- The Bank of Ghana’s assessment of Capital Bank indicated that it was heavily deficient in capital and liquidity, posing a risk to both depositors and the banking system. This assessment ultimately led to the revocation of the bank’s license.
William Ato Essien’s sentencing is a significant development in the broader context of Ghana’s banking sector cleanup and financial sector reforms, as it underscores the commitment to holding individuals accountable for financial misconduct.