NPP COLLAPSES OTABIL BANK   

…As he fails to raise church collection to save it

The New Patriotic Party (NPP) government’s collapse of Capital Bank, a private bank that was licensed by, and flourished under, the regime of the late President JEA Mills, is a coup de-grace to a hopeless battle that had been desperately fought to save the bank.

In the buildup to the collapse, desperado moves to salvage the situation had included Board Chairman, Pastor Mensah Otabil, raising offertory at his church, the International Central Gospel Church (ICGC), to improve the liquidity of the bank.

Sources say Pastor Otabil’s attempt to use church to save bank had led to him overburdening his church’s congregants with many expensive church collections that were directly paid into the church’s account with the Capital Bank.

One of the many collections that Pastor Otabil had instituted was the so-called “Special Offering” at the ICGC’s “Greater Works” conference.

Readers would recall that a few weeks ago, Pastor Otabil and the ICGC were the subjects of serious trolling on social media when it emerged that the ICGC’s 2016 Greater Works Conference had inflicted extortionate levies on congregants by way of offering.

A snapshot of a so-called “Special Offering” from the conference which had gone viral on social media listed a pecking-order of six- seed offering categories and quoted hefty dollar-denominated amounts against them.

The highest category, designated, “Millionaire Status” had as quoted premium, US$5,000 or the cedi equivalent of GHc21, 000 (210million old cedis).

The next category, designated “Seed of a Thousand Times More” had US$1,000 or GHc4,250 as premium while a, “Seed of Completion” category had had US$520 as quoted premium.

“24 Hour Miracle,” “100% Life Improvement” and “Seed of Projection” categories had had US$240, US$100, and US$70 quoted against them respectively.

Revealingly, under the quotations of this so-called ‘Special Offering,’ the church had directed that, “all cheques payable to; ICGC Special Events, Capital Bank, Account Number 1120000416451.”

Pastor Mensah Otabil, a shrewd motivational speaker, had, thus, used the “Special Offering” of his ICGC’s “Greater Works” Conference to solicit cash from his congregants whom he had directed to pay into the Capital Bank account of the church.

It is the same Capital Bank that has collapsed.

Yesterday, the Bank of Ghana explained that before it revoked the Capital Bank’s operational licence, it had given the bank several opportunities to get its finances in shape.

Pastor Mensah Otabil’s direction to his church members to pay hefty offertories from the 2016 Greater Works Conference into the ICGC’s account with Capital Bank suggests he tried to fleece the flock of God to save Capital Bank, of which he was Board Chairman, from collapse.

Sources claim it is not only the Greater Works Conference that Pastor Otabil had used to raise money for Capital Bank and that he had also instituted a whole lot of other collections at the church to raise money for the failing bank.

Apparently, however, the liabilities of Capital Bank, which include a five-year sponsorship of Ghana’s Premier League, worth US$10million, was too monumental to be surmounted with church collection.

Yesterday, August 14, the BoG announced a revocation of the licence of the bank, along with that of the UT Bank, which is owned popular ex-soldier, Prince Kofi Amoabeng.

The statement which announced the revocation also stated that the assets and liabilities of both banks have been turned over to the Ghana Commercial Bank.

In effect, therefore, Capital Bank collapsed, in spite of the best efforts of its owners to save it, including heroic efforts by the Board Chairman to raise collection from his church members for the bank.

It is not clear if the Managing Director of the bank, Rev. Fitzgerald Odonkor, who is also the General Overseer of the Harvest International Ministries Church, had also attempted to raise collection at his church to help out the bank.

The BoG has explained that before the revocation of the licences of both the Capital Bank and the UT Bank, and approval of the Purchase and Assumption Agreement that allows the GCB to take over the banks, it had given the two banks several opportunities to avert the collapse.

“The Bank of Ghana made efforts to help UT Bank and Capital Bank recover via private alternatives; however, the banks were unable to develop an acceptable plan. After exhausting all other alternatives, the BOG has chosen to resolve them via the least costly method of a Purchase and Assumption transaction to protect depositors’ funds,” a statement from the BoG explains.

Apparently, it was during this time that Pastor Mensah Otabil instituted a myriad of church collections at the ICGC to raise money for the bank.

Revoking the licences of the two banks, the BoG explained that both UT and Capital were, “deeply insolvent,” meaning that their liabilities exceeded their assets, putting them in a position not to be able to meet their obligations as and when they fell due.

“Despite repeated agreements between the Bank of Ghana and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls, the owners and managers of UT Bank and Capital Bank were unable to increase the capital of the banks to address the insolvency,” the BoG’s statement said.

It said, consequently, to protect customers, the BOG had decided to revoke the licenses of UT Bank and Capital Bank under a Purchase and Assumption transaction.

The revocation of the licenses of the two banks had been done along with the BoG’s approval of a Purchase and Assumption agreement, which allowed GCB Bank to take over all deposit liabilities and selected assets of both UT Bank and Capital Bank.

“These actions are in line with the provisions of section 123 of the Banks and Specialized Deposit Taking Institutions (SDIs) Act, 2016 (Act 930). In particular, the action by the Bank of Ghana involves the following: – Revoke the licenses of UT Bank and Capital Bank., – Possess the banks and appoint a Receiver; – Execute a Purchase and Assumption Agreement (P&A) allowing GCB Bank to take over all the deposits and purchases of selected assets. The rest of the liabilities would be settled by the receiver through the realization of the assets,” the BoG explained.

Before the collapse, it said that the BoG had made efforts to help UT and Capital recover through some private alternatives, but that even so, the two banks had been unable to develop an acceptable plan.

“After exhausting all other alternatives, the BOG has chosen to resolve them via the least costly method of a Purchase and Assumption transaction to protect depositors’ funds.”

The development means that serious endowment assets that the Capital Bank owns are to be taken over by the GCB as Capital’s customers become customers of GCB.

Assets of Capital include the bank’s Capital Plaza head office building on the Spintex Road and 16 operational branches across Ghana.

Interestingly, Capital Bank, whose Board Chairman, Pastor Mensah Otabil, is an arch critic of the National Democratic Congress (NDC), had been given the licence to operate as bank by the erstwhile NDC government, led by the late President Mills.

As Pastor Mensah Otabil’s own beloved NPP government collapses his bank for him due to insolvency, it is worth noting that this same bank had flourished during the Mills regime, growing its assets to a whopping USD140million in 2013.

Capital Bank, founded by William Ato Essien, had started as a microfinance company, on October 29, 2009, 10 months after President Mills and the NDC had been elected into office.

As the assets of the firm grew, it became a Savings and Loans Company, known as First Capital Plus Saving and Loans Company. In 2010, amidst the Mills administration beating down inflation to single digit, First Capital Plus grew its deposit base to GHc36.06 million and total asset to some GHc47.18 million.

In 2013, First Capital Plus Bank had a deposit base of Ghc211.11 million and total assets of Ghc286.80million. it also had a market share of 16% of the advances of savings and loans companies and 19% of the sector’s total assets.

Capital’s employee base too grew rapidly into 355 and currently has 15 branches covering five regions. The company grew its base deposit and assets from its inception till 2013 when it applied and was awarded a provisional universal banking license in July, 2012.

After the six-month provisional period, it was given a full license by the BoG under which was then headed by then Governor Paa Kwesi Amissah-Arthur, on December 4, 2013 and became officially known as First Capital Plus Bank.

The firm later re-branded to Capital Bank in 2015.

Interestingly, even though Capital bank enjoyed growth under the Mills government, Pastor Mensah Otabil, the chairman of the bank’s board, had made it his duty to constantly detract the Mills NDC government under which the bank grew.

Pastor Otabil, popularly believed to be an NPP adherent, so hated the NDC that in addition to using his church pulpit to preach several sermons against the NDC government, he had also refused to partake in a National Day of Prayer and Thanksgiving that President Evans Atta Mills had instituted.

As fate would have it, however, the same NPP that Pastor Otabil had hated the NDC for is the party whose government has now collapsed his bank even though he had tried hard to salvage the same bank with church collection.

Capital Bank had flourished under the NDC government-led by President Mills which had also given it the operational license that the NPP government has revoked.

 

 

Source: therepublicnewsonline.com/ Fiifi Samuels

 

The Republic News Online

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