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Beige Bank’s customer receives GH¢500k despite being in receivership -Sory

Thaddeus Sory, counsel for the Founder of Beige Bank, has expressed concerns over how BCAM was able to credit GH¢500,000 to a customer of the defunct bank, almost eight months after its receivership.

According to him, at the time BCAM credited Beige Bank’s customer with the amount, the Consolidated Bank Ghana Limited was in charge.

Meanwhile, he said a lead member of the Receiver’s team, Julius Ayivor, is unable to establish what relationship created the credit transaction that resulted in the BCAM payment of GH¢500,000 to the customer, since the receiver was in charge.

He said this while cross-examining Julius Ayivor at the Economic and Financial Division of the Accra High Court, presided over by Justice Afia Serwaa Asare Botwe, on Monday.

This was as the first prosecution witness (PW1), Michael Nyimaku, told the court that Beige Bank transferred about GH¢4 million from the said customer’s account to BCAM, and then to a fictitious account.

Mr. Ayivor also testified that Beige Bank, at the time of receivership, had a total assert of GH¢95 million, as well as validated liabilities, amounting to about GH¢2.2 billion.
The following is some questions (Q) and answers (A) of the cross-examination:

Q: It’s been three years now, have they completed their validation work?
A: Yes.
Q: The value has been determined by the validation expert, is that correct?

A: Most of it. This is because some of the assets couldn’t be valued. Example exhibit B, licenses, for various computer applications that the bank owned, softwares etc, these were assets on the books of the bank that were untangled, so you couldn’t touch them or feel them.

Q: Are you saying that because these cannot be valued, the work of the validation experts cannot be completed?
A: No my lady, I did not say that.
Q: Have they (validation experts) indicated when their work will be competed?

A: I’ve already explained that.
Q: That means the report has been completed and submitted to Bank of Ghana. Is that correct?
A: Yes.

Q: The report the Receiver prepared for the Attorney-General’s Department contains information that was extracted from reports to the BoG. Is that correct?
A: That is correct.
Q: If you take a look at your witness statement, in paragraph 8 you testified that the bank’s liability to its customers amounted to GH¢2.1 billion. Is that correct?

A: My lady, that is not correct. What that paragraph says is that the government provided funding totaling GH¢2.1 billion to settle depositors that had placed money with Beige Bank. The bank’s liability is far in excess of GH¢2.1 billion.

Q: Throughout your witness statement, you did not talk about the bank’s assets?
A: I did.
Q: Where did you indicate the value of the bank’s assets?

A: In that same paragraph (8), the GH¢2.1 billion is the difference between the value of the bank’s total assets that was transferred to the Consolidated Bank Ghana Limited, under a purchasing assumption agreement, and then the total of the bank’s liability; the difference between the two numbers is what gives us the GH¢2.1 billion funding that the government had to provide.

In addition to that, in some other paragraphs, I also spoke about investments of the bank totaling about GH¢61 million that were transferred to the Beige Group.

Q: What are the two numbers of which the difference gave you the GH¢2.1 billion?

A: My lady the total validated assets of the bank amounting to about GH¢95 million and then the total validated liabilities of the bank amounting to about GH¢2.2 billion.

Q: These things you’ve testified about are not presented in any documents that you presented to the court. Is that correct?
A: Not explicitly my lady.

Q: Implying where are they?
A: They are contained in Exhibit 1, and also in paragraph 8 of my witness statement.

Q: In Exhibit 1, the valuation process was clearly not complete, is that correct?
A: My lady, that is not correct. In Exhibit 1, it says the valuation of some classes of assets is not complete.

Q: Let’s go to Paragraph 22 of your witness statement. In that paragraph, you testified about 12 customers from whose accounts fixed deposits were transfers from the bank to BCAM account?

A: Yes my lady, that’s correct.
Q: Now, in respect of the 12 customers, you only explained the relationship between the bank, the customer, and BCAM in respect of the accounts of Emmanuel Richard Ofori in Paragraph 23, is that correct?
A: That is correct my lord, in that paragraph I explained how funds for fixed deposits meant to be placed with the bank were transferred from Emmanuel Richard Ofor’s account to BCAM.

Q: You tendered Exhibit H23, which is Emmanuel Richard Ofori’s statement of account with the bank. Is that correct?
A: Yes.

Q: In paragraph 23 of your witness statement, you said this Emmanuel Ofori made two (check from witness statements) … is that correct?
A: That’s correct my lady.
Q: If you take a look at Exhibit H 23, no part of that statement of account reflects the date in September 2017?

A: Yes.
Q: In the same paragraph 23, your testimony is based on the BCAM statement of account, which is marked Exhibit H 22?
A: That’s correct my lady.
Q: If you look at the whole account of Exhibit H 22 dated September 2017, it does not reflect, is that correct?
A: That is correct my lady.

Q: Exhibit H 22 expresses itself to be made up of 7 pages. Is that correct?

A: That is correct my lady. But my lady, it is only a portion of the entire statement of account of BCAM that is relevant to Emmanuel Richard Ofori’s case that was extracted and presented to the court.

The BCAM statement is so large that if all of that statement has to be printed… So it is just the pages that reflects how Emmanuel Richard Ofori’s investment totaling GH¢4 million was transferred from his account to the BCAM account that we presented.

Q: Now, a reading of Exhibit H 22 will show that it represents transactions for just one day. Is that correct?

A: Yes my lady. The transactions on Exhibit H 22, all happened on March 16, 2018.

Q: Take a look at Exhibit H 23, which is the statement of account of Emmanuel Richard Ofori. Can you tell the court when this money was transferred from his account with Beige to BCAM?

A: My lady, on Exhibit H 23, Emmanuel Richard Ofori’s investment was transferred from his account, on March 16, 2018, to the BCAM account on the same date.

Q: On the same day, March 8, there was an earlier transaction in favour of the same Emmanuel Ofori in the sum of GH¢2 million, representing repayment of principal to Emmanuel Ofori. Is that correct?

A: That’s correct my lady.
Q: In respect of that principal amount of GH¢2 million, there is a credit transaction of GH¢254,301,037 repressing interest on that same million in favour of Emmanuel Richard Ofori?
A: That’s correct my lady.

Q: On the 15th March 2018, the sums of GH¢2 million and also GH¢254,301,050 are credited to the accounts of Emmanuel Richard Ofori, representing principal and interest payments to him?

A: Yes my lady.
Q: Now this brought his closing balance to GH¢420,518,097?
A: Yes.

Q; Exhibit H23 does not reflect the transactions that resulted in this payment. Is that correct?
A: Yes.

Q: And so we are not able to tell what the terms were for you for which Emanuel Ofori deposited his money with the bank?

A: Not explicitly, but you can understand from the way monies came in and out of Emmanuel Ofori’s account; what the terms were. For instance, you can tell by reference to the interest of GH¢254,301,037 what the interest in terms of percentage was.

Q: How can we tell the interest from Exhibit H 23?
A: You can tell the per cent tags by expressing the interest amount as a percentage of the principal repayment of GH¢2 million.

Q: Is the duration important?
A: Yes.

Q: This duration is not expressed in Exhibit H 22?
A: No my lady. It’s not.

Q: I’m putting it to you that your testimony to the court that you did not include any other parts of the BCAM statement beyond that contained in Exhibit H 22, because it’s not relevant is not correct?
A: My lady, that is correct.

That is the point I made that the inclusion of just the transactions on Exhibit 22 was as a result of the fact that that presented evidence that Emmanuel Ofori’s GH¢4 million investment placed with the bank was transferred to BCAM on 16th March 2018 is correct.

Q: Exhibit H 22 is just 7 pages, and you’ve exhibited in your witness statement several other statements to BCAM containing more than 7 pages. I’m putting it to you that you refused to show us the other 6 pages in order to mislead the court.

A: Exhibit H 22 was just one page, and as I earlier explained, BCAM Bank account statement is so huge that we only decided to extract portions that were relevant to the matters under discussion.

My lady, when we were asked to provide the entire list of BCAM statements, we did provide that. So any transaction that is not on this Exhibit H 22 will be contained in those extra information that we provided.

Q: Take a look at the bottom of Exhibit H 22, the suggestion that the BCAM account goes into several pages, which is the reason why you’ve not showed the other six pages, is incorrect?

A: My lady, that is not true, and I can demonstrate; the BCAM account in question is numbered 10,1003431365. Exhibit H21 has underneath it page 1 of 7. When you look at Exhibit H16, numbered 1000348635, you’ll note that within that statement that page 1 of 13 and the transaction on that page relate to only April 16, 2018, which means that the notion that the BCAM statement is only 7 pages cannot be correct.

Because of the volume of transactions that is contained in the BCAM statement, we only extracted from the banking software portions that were relevant to the customers in question.

You’ll also note from my witness statement, the number of customers whose fixed deposits were moved to BCAM were in excess of 10,000 customers. What this means on the bank account statement of BCAM 100003481365, you’ll have transactions that will be 10,000 and over, adding that together with other transactions from the banking software will be very difficult, so to ensure you get the information you require, the reasonable thing we did was to extract portions of BCAM statement as it was relevant to the examples that I cited in my witness statement.

Q: If Exhibits H16 and H22 are the same as you suggest, then I’m putting it to you; printouts of statements from the same exhibit must reflect the specific page on which the relevant transaction occurred out of 13 pages. So two printouts from the same document cannot read 1 out of 13, and the other one out of 7 respectively, I’m putting that to you?

A: My lady, that is not entirely correct. The way a bank’s banking software works is that when you want to extract [a] statement of transactions covering a set period, you would input a start date and an end date.

Once that query is sent to the system, the system will spool out transactions covering only those two dates, and the system will automatically number the first page of that spoon out as page 1 and then the subsequent page will follow.

So, therefore, if the number of pages you queried is 13 pages, you would have page 1 of the spool out being page 1 of 13. On the other hand, if the number of pages of that query is 7 pages, the system will automatically number page 1 of the spool out as page 1 of 7.

Separate spool outs were done from each of the 12 examples I presented in my witness statements. So the page numbering will be different.

Q: In Exhibit H 22, you spooled out just one page?
A: That is not correct. Exhibit H 22 is just one page of the spool out we did, it’s not the same as we spooled out.

Q: Why did you spool out 7 pages and presented only one; the other pages were irrelevant?

A: Because the transaction in question involving Ofori’s investment showed on page 1 of the 7 pages that the system gave us. My lady, if I even present page 2 of 7, page 2 of 7 up to page 7 of 7, you’ll realise that the transactions on all these 7 pages would only relate to March 16, 2018, just one day, so what we sought to do was just to present the page that was relevant.

Q: Look at Exhibit H 23, you’ll realise that after Emanuel Ofori redeemed his investments on March 15, 2018, GH¢4 million of it out of the amount he was credited with was now reinvented with BCAM as per Exhibit H 22.

A: That’s not entirely correct. It is the 2 investments; one that matured on March 9, 2018, and the other that matured on March 15, 2018, both GH¢2 million each, totaling GH¢4 million. That is the 4 million that was transferred from Emmanuel’s account to BCAM on March 16, 2018.

Q: You earlier testified that without knowing from Exhibit H23 the terms on which the GH¢2 million respectively redeemed on the 9th and on 15th of March, and how it was invested, you’re able to tell the rate of interest applied to it. Is that correct?

A: Yes my lady, that’s correct.
Q: Exhibit H 23 does not tell us the terms upon which the GH¢4 million was invested with BCAM, is that correct?

A: That’s correct my lady.
Q: So we cannot tell the rate of interest applicable to the 4 million?

A: That’s correct my lady, and that’s because this 4 million in question was transferred to BCAM, an entity that is separate from Beige Bank.

I’m able to tell the terms of the GH¢2 million investments because those funds were brought by Emmanuel Richard Ofori to Beige Bank which is currently under the control of the Receiver, so any information pertaining to those two 2 millions can be easily accessed.

I’m not able to tell, my lady, on what terms the GH¢4 million that was moved to BCAM was agreed.

Q: So take a look at the same Exhibit H 23, page 2 of it, there is a transaction recorded for December 6, 2018?
A: Yes my lady. I see three transactions that were recorded on December 6, 2018 on Exhibit H23.

Q: Now, in December 2018, the Receiver was in charge. Is that correct?
A: That’s correct my lady.

Q: The first transaction on December 6, 2018, refers to BCAM, and Emanuel Ofori’s account is credited with GH¢500,000. Is that correct?

A: That’s correct. The first transaction has a description BCAM FTD payment DD061218, in an amount of GH¢500,000.

Q: Apart from the transaction of March 16, 2018, by which the account of Richard Ofori was credited with 4 million, did the Receiver have any transaction with BCAM?

A: My lady, that is what the Receiver, together with CBG, did, because his deposits had to be paid back. As explained in paragraph 8 of my witness statement, repayment of Emmanuel Ofori fixed deposit of GH¢4 million is a component of the GH¢2.1 billion I earlier explained as funds provided by government to settle depositors.

Q: Are you able to tell the court what relationship created the credit transaction that resulted in the BCAM payment of GH¢500,000 to the credit of Emmanuel Ofori, since the Receiver was in charge?

A: My lady, I’m not able to tell, but I can check and revert to the court, and the reason is that on August 2, 2018, when the Receiver was appointed, all deposits accounts of customers of Beige Bank were transferred to Consolidated Bank Ghana Limited under a purchasing assumption agreement.

In effect, putting the accounts of all customers of Beige Bank under the purview of Consolidated Bank Ghana, so I can check with officials of Consolidated Bank Ghana to confirm what that GH¢500,000 deposits relates to.

Q: Now, when you compare the information on Exhibit H23, which confirms that payments were being made by BCAM on December 2018 when the Receiver was in charge, and Exhibit H 22, which truncates BCAM statement of account at March 2018, leading to about 8 months of statement of account, its completely incorrect that you left that out, because you thought it was irrelevant, I’m putting that to you?

A: My lady, when a customer’s deposit transferred from the bank to BCAM is paid by CBG to effectively put the customer in the position they were before.

In most circumstances, in describing that, CBG used the narration to BCAM repayments to clearly identify those repayments as deposits that had earlier been transferred from the bank to BCAM, and, my lady, even in the case of despots that were transferred from the bank to the Beige Group, those deposits when they were given to Beige by CBG through government bailout were mostly described on the statement of affected customers as TBG, meaning The Beige Group Fixed Term Deposits (FTD) repayment, and those payments were done after August 1, when the Receiver was appointed, and the customers confirmed that they were placed with Beige Bank, but were transferred to companies owned by the accused persons.

Q: From that Paragraph 22, your testimony is that the GH¢2 million from FASL came from BCAM, is that correct?

A: That is not entirely correct. So, yes, the transaction that resulted in GH¢2 million came from the BCAM account, but these were deposits of customers of Beige Bank, because transfers were, first of all, made from those customer accounts, numbering in excesses of 10,000 accounts into the BCAM account before the funds were moved from the BCAM account to that fictitious FASL account.

Q: As we speak, there is no one shred of evidence from you that confirms that CBG made any payments totaling GH¢2.1 billion to any of the 10,000 customers you alleged their monies were deposited to BCAM?
A: That evidence exists and can be made available to the court.

Q: Have you made it available to the court?
A: No.
Q: We’ll be waiting?

A: Because of the number.
Court direct witness to submit data of 10,000 customers by February 17, 2023.

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