01.04.2023 Crime & Punishment

Unibank Trial: Fictitious loans were originated by bank officials - Receiver tells court

Unibank Trial: Fictitious loans were originated by bank officials - Receivertells court
01.04.2023 LISTEN

Nii Amanor Dodoo, the Receiver of Unibank, has informed the Court that fictitious loans were originated by Madam Elsie Dansoa Kyere, a former Executive Head of Corporate Banking of Unibank and Benjamin Ofori, a former Executive Head of Credit Risk of Unibank.

He said this was done through memoranda that were channeled through Jeffrey Amon, a former senior Relationship Manager of Corporate Banking for approval from Dr Kwabena Duffour II and Mr Ekow Nyarko Dadzie-Dennis.

Nii Dodoo made this known in a cross examination by counsel for Madam Dansoa Kyere in Accra.

The accused persons in this matter have been charged with fraudulent breach of trust, money laundering, dishonest appropriation, wilfully causing financial loss to the Republic and conspiracy to commit crime.

At the time the license of Unibank was revoked, it was discovered that an amount of 5.7 billion cedis had been dishonestly appropriated by the shareholders with the connivance and assistance of some of the accused persons.

He said these loans in question were neither channeled through the Management Credit Committee, Executive Committee nor the Assets and Liabilities Committee.

These loans, according to the Receiver, were fictitious because they were made in the names of persons, who did not request that those accounts to be opened.

“That ordinarily, when loans are approved, the proceeds go to the customer,” he added.

He said the proceeds of these fictitious loans were rather credited to the Deferred Expenditure Account.

The Receiver said the accounts of the customers listed in the memoranda were all fictitious, since they were not the regular account numbers of those customers.

The memoranda requested for credit facilities to be disbursed into these fictitious accounts.

The Receiver also informed the Court that this request by Madam Dansoa Kyere, Jeffrey Amon and Benjamin Ofori sought the approval of the 4th Dr Duffuor II and Mr Dadzie-Dennis was wrong because the amounts involved could only have been approved by the board of Unibank.

He explained that the management of the bank in the review of their monthly management accounts were able to determine the actual profit or loss made.

This was then compared to the profit indicated in their prepared budget.

He said on this basis, they then determined how much loans should be generated to create interest.

The Receiver said these loans were backdated so the bank's system would generate and post the interest generated into the interest income account.

He also informed the Court that the shareholders of Unibank siphoned funds from the bank.

This was charged against the Deferred Expenditure Account, since this account

did not yield interest, they had to find a way of creating loan accounts that would generate interest.

According to the Receiver, these fictitious accounts were created to generate

interest income and to present a situation as though Unibank was operating profitably and close to the budget they had set.

“The fictitious loans were also created to conceal money siphoned from the bank by shareholders,” he added.

He said that Madam Dansoa Kyere played a significant role in this through the initiation of memoranda together with Amon and Ofori.

They did this with the approval of the Dr Duffuor II and Mr Dadzie-Dennis and by this, they significantly misstated the financial statements of Unibank.

The Receiver explained that there were meetings during which they planned to create the fictitious loans and generate fictitious interest income.

At these meetings, the customers in whose names the fictitious loans were to be created were identified and the interest rates to be applied agreed on.

He said the tabulation of the financial gap that needed to be filled was prepared and based on this, the quantum of loans that needed to be created were determined and signed off on.

‘This formed the basis on which entries were subsequently passed,” he added.

The Receiver informed the Court further that his team was informed by officials of the Finance Department of Unibank that this whole plan was arranged by the Dr Duffuor II, Mr Dadzie-Dennis, Madam Dansoa Kyere, Amon and Ofori.

He explained that because of the sensitive nature of these transactions, the originating documents were retrieved from

the Finance Department after the entries were passed.

He said an official of the Finance Department who believed that the entries which were being passed would create problems someday hid one of those documents which he shared with the Receiver's team.

The Court was informed that the financial statements of Unibank did not show the actual position of the Deferred Expenditure Account.

” My team was informed that
the balances on this account were intentionally excluded from the financial statements and the returns submitted to the Bank of Ghana,” he said.

He said these accused
persons concealed the balances on the Deferred Expenditure Account by creating the fictitious loans.

According to the Receiver, the deliberate attempts to conceal the magnitude of those transactions and failure to report the balances on the financial statements and actually transferring some of these funds to the fictitious accounts was wrong.

He informed the Court that the shareholders of Unibank accepted responsibility for the funds siphoned from the bank.

He indicated that the shareholders initially offered to hand over assets purchased with those funds.

They later proposed to set up a special
purpose vehicle to house those assets and to use the special purpose vehicle to secure loans to reimburse the bank.

The shareholders, according to the Receiver, offered to sought loans directly to pay back the siphoned funds. All these proposals, the Court was informed, were yet to materialize.

The case was adjourned to April 18th and 19th, 2023.