FEATURED: True Descendants Of Ab-Ram Are Indeed In Ghana!!...

23.08.2019 Business & Finance

Midland Savings Hit With Massive Losses

By News Desk
Michael Adjovu, MD of Midland Savings & Loans Company
LISTEN AUG 23, 2019
Michael Adjovu, MD of Midland Savings & Loans Company

Bank of Ghana (BoG) has revealed Midland Savings and Loans Company Limited registered persistent operational losses which made it difficult for it tooperate.

This culminated in an adjusted negative capital adequacy ratio (CAR) and negative net worth for the company as of August 31, 2018.

A Bank of Ghana (BoG) report on the company which revealed this said Midland Savings and Loans was over exposed to its related parties including Liberty Asset Management, Liberty DMI Microfinance and Griffin Financial Services which was rolled over in spite of the liquidity challenges it faced.

“The institution was found to be facing liquidity challenges in January 2017. A subsequent assessment indicated that the institution was undercapitalized and also facing serious liquidity challenges,” according to the report.

The BoG report continued that Midland Savings and Loans Company Ltd. recorded net worth of negative GH¢148.92 million as of end May 2019 indicates that its paid-up capital is impaired in violation of Section 28(1) Act 930.

“The institution's capital adequacy ratio of negative 311.91% as of end May 2019 is in violation of Section 29(2) of Act 930.

“The institution failed to conduct due diligence on counter parties resulting in the impairment of some investments,” it revealed.

Additionally, the report said Midland Savings & Loans Company Ltd. consistently breached the minimum cash reserve ratio requirement leaving a cash reserve requirement of 0.23% at end May 2019.

Also, the company failed to keep accounting records in a manner that gives an accurate and reliable account of its transactions.

As a result, the company was unable to submit prudential returns regularly and could not provide the various schedules that reconciled with key balance sheets such as loans and investments.

Furthermore, the company was faced with severe liquidity challenges, which made it unable to provide adequate funds to run the various branches, thus rendering the branches inactive.

“The inability of the company to honour customers' withdrawal request has resulted in customers resorting to the use of their lawyers in filing claims on the institution and complaints to the Bank of Ghana,” it mentioned.

The BoG said since August 2018, it engaged the board and senior management on the need to inject additional capital.

Midland Savings and Loans Company Ltd. was licensed by the BoG to operate as a Savings and Loans Company on October 21, 1996. It commenced full operations on March 13, 1997.

—Daily Guide