Full report on the collapse of First Capital Plus Bank

Dr Henry Kofi Wampah, Governor Bank of Ghana
An internal report has confirmed the difficulties of the First Capital Plus Bank and it is being published unedited for the benefit of our readers;

FIRST CAPITAL PLUS BANK LIMITED
CONFIDENTIAL REPORT
PRESENTED BY THE BOARD SPECIAL COMMITTEE TASKED TO ENQUIRE INTO TPF AND TO SEGREGATE LIABILITIES

1.0 INTRODUCTION
2.0 MEMBERS OF THE COMMITTEE
3.0 TERMS OF REFERENCE
4.0 METHODOLOGY
4.1 DOCUMENTS REVIEWED
4.2 RESOURCE PERSONS USED
4.3 WITNESSES CALLED
4.4 CONCESSIONARY BASIS FOR CONCLUSIONS
5.0 FINDINGS OF FACT
6.0 CONCLUSIONS
7.0 RECOMMENDATIONS
8.0 CLOSING
9.0 ANNEXURES
1.0 INTRODUCTION
1.1. The Board of Directors on the 18th September, 2014 constituted a three (3) man special committee out of its membership to probe into the Third Party Funds, and to segregate liabilities of persons and/or individuals when appropriate.

2.0. MEMBERSHIP OF THE COMMITTEE
i. Alhaji Amadu Montia-Chairman
ii. Rev Fitzgerald Odonkor-Member
iii. Mr Micheal Amankwah-Member
3.0 TERMS OF REFERENCE
i. To ascertain the full extent of the TPF
ii. To segregate liabilities and apportion same to persons liable thereunder

4.0. METHODOLOGY
4.1 DOCUMENTATION REVIEWED
4.1.1 The Committee obtained and reviewed the following documents:

i. TPF and Non TPF-Historical Developments-prepared by Mr William Ato Essien

ii. Evidence of treatments on the Bank's books of payments that went into procuring assets for the Bank, i.e., non TPF payments by the Bank.

iii.Source documents of TPF transactions printed out of the Bank's books.

iv. Fixed Deposit Certificate of Investment claims made by individuals and other financial institutions that did not reflect in the Banks books.

v. Evidence of correspondences and advise letters evidencing various TPF transactions.

vi. Statement of accounts of Liberty Financial Services.

vii. Statement of accounts of FCP Trust.
vii. Statement of accounts of SIC-FSL with FCP
ix. Statement of accounts, Twenty First Century Construction Limited

x. Historical schedule of interest rates on TPF
xi. Various computations and compilations by both the witnesses and resource persons.

4.2. RESOURCE PERSONS USED
4.2.1 The Committee used the services of the Bank's General Managers in charge of Finance & Strategy and Treasury.

4.2.2. The Bank's Internal Auditor also provided some assistance.

4.3 WITNESSES CALLED
4.3.1. The Committee invited and took evidence from the following persons.

i. Mr William Ato Essien
ii. Dr Stephen Enchill
iii.Mr Isaac Osah Thompson-Mensah
iv. Mr John Kofi Mensah
4.4 CONCESSIONARY BASIS FOR THE COMMITTEE'S CONCLUSIONS

4.4.1. The Committee proceeded to work and to reach the various conclusions it reached based on some clear understanding and agreements among the various witnesses who appeared before it.

4.4.2. The total figure presented by Mr. Essien in his paper titled TPF and Non TPF-historical developments, was accepted as a true reflection of receipts and expenditure as claimed in the said paper. Interests were also calculated at the prevailing interest rates at the particular periods of the receipts of the said monies and credited to Mr Essien. Finder's fees of about Four Million Ghana Cedis on all monies received and used as capital for FCP was also credited to Mr Essien.

4.4.3. Additional liabilities paid from Mr Essien's Five Million Ghana Cedis payment to FCP were reversed and the said payment treated as credit to him.

4.4.4. Expenditure incurred on attracting J.K Mensah into FCP was treated as expenditure against FCP.

4.4.5. Expenditure incurred on incorporating FCP, Protocols, Preference Shares and other miscellaneous were all treated as expenditure against FCP and debited to shareholders.

4.4.6. Three other individuals were also identified as having some debits standing in their names which they personally have to redeem.

5.0. FINDINGS OF FACT
5.1 After reviewing the various documentations, taking evidence from the Witnesses and listening to the resource persons, the Committee established:

i. That some expenditure items incurred at the incorporation of FCP reflect in the Bank's records.

1. That there were other expenditure items that do not reflect in the Bank's records.
   iii. That there were no documentary evidence for most of the expenditure made in the name of the Bank.

1v. That some individuals and institutions had made various deposits with the Bank which did not reflect on the Bank's books.

1. That various persons had contracted personal liabilities which the Bank had either redeemed out of its own resources or which were still standing in the name of the Bank.
   vi. That some of the Bank's investments with other institutions had been used to off-set some personal liabilities.

vii. That part of the purchase price of the Labone Property and expenditure on the Tesano office renovations were incurred from the Bank's books.

viii. That huge expenditure overheads were made in the name of protocol with no records to substantiate.

5.2 The Labone Property
ix. That the total cost of the Labone property was USD 3 million, out of which an amount of GHS 2 million being part payment thereof was paid from the Bank's resources.

1. An account in the name of Liberty Financial Services was opened as the medium for the payment of the said amount, and in favour of Mr. Patrick Sarpong, representative of the Transferor of the Labone Property.
2. In total, an amount of about GHS 5.8 Million went through the said account. The Committee however got confirmation from FCP's Finance Department that the GHS 2,000,ooo.00 payment was specifically for the purchase of the Labone Property. There were no confirmations for the other transactions on the said accounts. Suffice to say, some of them were credit interest and payments of interest on investment. (see Appendix k series page 28).

xii. The committee also chanced upon a demand notice by Minka-Premo&Co. Solicitors, acting on behalf of Mr. Patrick G.A Sarpong, who was the Lawful Attorney of the Vendor of the said property to FCP. In the said letter, they were making a demand on some investments their clients had with FCP. (see Appendix I series page 23).

xiii. The Committee then requested for further information from the said Solicitors on how his client's monies were paid. However, they were unable to provide any information with regards to the said request.

6.o CONCLUSIONS
6.1 The Committee reached various conclusions with regards to individuals and corporate liabilities. These conclusions were reached in agreement with all the witnesses which could prove detrimental to their interests. The following conclusions were reached:

i. A total amount of GHS 136, 726,101.00 was identified as TPF

ii. Out of the said amount, GHS 56,788,289.00 was to be debited to shareholders.

iii. GHS 1,557,089.00 was to be debited to Mr Ossah.

iv. GHS 1,245,671.00 was to be debited to Dr. Enchill

v. GHS 77,135,052 was to be debited to Mr Essien.
vi. In the absence of any superior evidence to the contrary, The Labone land, title deeds of which is currently in the custody of Mr. Essien could have been paid for partly by him, perhaps from TPF or his own resources.

6.2 The liability of shareholders in proposition to their shareholdings, as per the amount standing against shareholders ( the former shareholding structure before the David Goldman share transfer is herby applicable)

Name of shareholder %of shares Liability
1. Mr Willaim Ato Essien 52 29,529,910.28
2. Dr Stephen Enchill 11 6,246,711.79
3. Mr John Kofi Mensah 10 5,678,828.90
4. Otabil& Associates Rep
by Dr. M. Otabil 7 3,975,180.23
5. Isaac Osah Thompson-Mensah 5 2,839,414.45
6. Mr. Kinsley Attah Ghansah 5 2,839,414.45
7. Mr Isaac Oheneba Osei Akoto 5 2,839,414.45
8. International Gospel Church
rep, by Dr Mensah Otabil 3 1,703,648.67
9. Rev. Edwin Obeng Donkor 2 1,1135,765.78
Total 100 56,788,289.00
7.0 RECOMMENDATIONS
7.1 The Committee makes the following recommendations;

i. That all amounts identified as standing in the names of individuals should be paid within 7 days of a formal demand made on them. This is inclusive of various liabilities shown in the table above.

1. In default of (i) above, steps should be taken to compel payment including without limitation the attachment of shares in the Bank of such persons.

iii. That subject to any contrary information that will become apparent after the Committee's work, Mr William Ato Essein be allowed to keep the Labone Property upon the payment to the Bank of an amount of GHS 5,190,295.97 being the sum total of the GHS 2,000,000.00 paid from FCP's accounts and interests accruing thereon at the prevailing interest rates (see Appendix j page 27).

The said amount should also be paid within 7 days of a formal request made for that purpose.

1. In default of (iii), further shares should be attached and/or personal properties attached to discharge the said liability.

8.0 CLOSING
8.1 The Committee expresses its gratitude to the Witnesses and the Resource Persons for the times spent with the Committee, the documents presented for its review and the various concessions made and understandings reached which made the Committee's work smooth.

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