Unless he can come up with an amount in excess of GHC50 million, William Ato Essien will spend 15 years in jail.
He is the first major actor in the banking sector clean up to be jailed.
For years, Essien has been battling in the law courts to retain his freedom. He battled allegations that he diverted Bank of Ghana liquidity support for his personal Capital Bank in a manner that put the savings and money of several customers at significant risk.
But what were the exact nature of the crimes for which a judge sentenced him to 15 years in prison on Thursday, October 12, 2023?
The crimes
Founder of defunct Capital Bank William Ato Essien in December, 2022, admitted to committing the offences of stealing and money laundering. This was at a time when the court was set to deliver its judgment.
He pleaded guilty and informed the court he was refunding GHC90 million to the state. GHC30 million was paid upfront with a further pledge to refund the GHC60 million in 3 instalments of GHC20 million each. The court indicated that the first GHC20 million was to be paid by end of April, 2023. Should he fail to pay, the entire GHC60 million becomes due or the court imposes custodial sentence.
The law
This arrangement is governed by Section 35 of the Courts Act 1993 (ACT 459). It provides that where a person is charged with an offence which has caused economic loss, harm or damage to the state, to inform the prosecutor that he admits to the offence. Such a person must commit to offer compensation for the loss. The prosecutor must consider and determine whether it is satisfactory.
If the offer is not acceptable to the prosecution, the case before the Court proceeds. If, however, the offer is acceptable to the prosecution, the prosecutor shall in the presence of the accused, inform the Court which shall consider if the offer of compensation or restitution and reparation is satisfactory. In the event it concludes it is satisfactory, it will accept a plea of guilty from the accused and convict the accused on his own plea. An order will then be made for payment and where there is a default the Court shall proceed to pass a custodial sentence on the accused.
The facts surrounding the Essien case as presented by prosecutors
William Essien was the majority shareholder of Capital Bank. Between June 2015 and August 2017, the bank was granted a total sum of GHC620 million as liquidity support to enable it to meet its capital adequacy ratio and help it service its maturing debt obligations.
In October 2015, he caused a transfer of a sum of GHC120 million of the liquidity support amount to All Time Capital Limited (All Time), investment management and advisory firm. GHC100 million of the GHC120million which had been transferred to All Time, was further transferred to MC Management Services while GHC20million of the amount of GHC120 million was transferred to Pronto Construction and Supplies Limited (Pronto Construction).
The sum of GHC100 million, which was transferred to MC Management Services was subsequently represented to the Bank of Ghana as initial Capital of Sovereign Bank while the GHC20 million that was transferred to Pronto Construction was used by the Managing Director of Pronto Construction, ostensibly to purchase shares in Capital Bank.
Again, GHC65million out of the BOG liquidity support of GHC620 million was transferred to Nordea Capital Limited described as an investment bank. Of the amount of GHC65 million, GHC30 million to be transferred to MC Management Services, which was represented to BOG as an additional initial capital of Sovereign Bank.
The remaining GHC35 million of the GHC65 million was paid into a Fidelity Bank account of Brietling Services, a company also established by Ato Essien. The amount of GHC35 million which was transferred into the account of Brietling Services was subsequently transferred to Capital Africa Group, a company owned by Mr. Essien.
The total amount of GHC130 million which was represented as initial capital of Sovereign Bank was eventually channelled into Capital Africa Group, Mr. Essien’s company. The monies transferred into Capital Africa Group was eventually dissipated by Mr. Essien and another accused person who was eventually found not guilty during the trial.
Between June 2015 and October 2016, Ato Essien appropriated a total of GHC27.5million of the liquidity support which was conveyed in jute bags to him and purportedly used as payment for business promotion.
In June 2017, in furtherance of the conversion of portions of the GHC620 million liquidity support, he caused a sum of GHC100 million to be paid into a Capital Bank account held by the Managing Director of the following three companies; Maripoma Enterprise Limited, Hardwick Limited and Volta Impex Enterprise Limited opened purposely to receive the amount. The GHC100 million was to be used by the Managing Director of the three companies ostensibly as payment for 30% shares in Capital Bank.
As a cover-up of the conversion, he prevailed on the Managing Director of the companies to submit copies of Government Payment Certificates of the three (3) companies valued at GHC135million to be discounted to GHC105 million by Capital Bank, to be used as collateral for the purported loan of GHC100 million.
He then caused GHC70 million out of the GHC100 million that had been previously paid into the Managing Director’s account at Capital Bank, to be transferred to another accused person who was also cleared of any wrongdoing in court.
Bank of Ghana’s assessment of Capital Bank
The Central Bank said Capital Bank was heavily deficient in capital and liquidity and its continuous operation would jeorpadise not only the depositors’ funds, but also pose a threat to the banking system. Governor of the BOG Dr. Ernest Addison made the following remarks at a news conference;
“It has therefore, become necessary for us to revoke their banking licenses and approve this transaction to allow GCB, the large bank with the right balance sheet to take over all the deposits and selected assets of the two banks (UT and capital-Bank).”
However, Ato Essien maintained the bank was in good condition alleging in an interview with Accra-based Metro TV that the Finance Minister, Ken Ofori Atta had tried to buy his bank in 2016.
“If the Bank was that bad, our current Finance Minister, Hon Ken Ofori Atta together with the Chief Executive Officer of Enterprise group, Kelly Gadzekpo were in my office, to say, they were interested in buying Capital Bank,” he alleged.
Mr. Ofori Atta and Kelly Gadzekpo denied the claim.
Then Board Chairman of the Bulk Oil Storage and Transportation Company (BOST), Kwame Acheampong Kyei resigned from office over the collapse of Sovereign Bank, one of five banks the Bank of Ghana shut down.
Mr Kyei stated in a letter dated August 22 and addressed to President Addo Dankwa Akufo-Addo that “in view of the recent developments relating to my association with the purchase and assumption of Sovereign Bank, and the resulting unfortunate furore in the media, I have decided to voluntarily step down as Chairman/Member of the Board of BOST for the time being.”
According to the Bank of Ghana, Sovereign Bank was closed down because it obtained its banking license under false pretences through the use of suspicious and non-existent capital.
However, in the wake of media discussions of the collapse of the bank, Dr. Kwame Acheampong Kyei explained that he resigned from the Board of Sovereign Bank in March 2018, when he noticed that certain improprieties had taken place in the management of the affairs of the bank without his knowledge.
He suggested that he left Sovereign Bank at least five months before the Bank of Ghana clampdown on the banking sector in August, 2018.
Who is Ato Essien?
William Ato Essien is a banker with a bachelor’s degree in marketing from Central University College. He first set up First Capital Plus (FCP) in 2009, a company which went on to grow as a microfinance with a deposit base of GHC36 million and with a total asset size of GHC47 million by the end of 2010. In 2011, he acquired a 24% stake in Gye Nyame Resources in Zimbabwe. The now-defunct diamond mine has been closed down on environmental grounds and bad business practices.
He also founded Essien Swiss International Capital Holdings. He grew up in Agona Swedru and attended Winneba Secondary School, after which he started trading in used clothing at Accra central, buying and re-selling Books on University campuses, selling stoves at Sunyani and has also earned a living as a head porter at Kaneshie market at the age of 16.
Before settling into mainstream micro-finance, Essien started a printing press called Wade Laurel Printing Press. He later started small Savings and Loans Company within his community which became Capital Bank, and later, was taken over by GCB Bank.
He additionally has majority interests in ESICH life Assurance Company Ltd, Ocean Spring Natural Mineral Water, Empire Radio and a partner Director for Lloyds Brokers Company Ltd. Essien is married to Gifty Essien with four children.
