Former board of defunct Heritage Bank has said the decision by the Bank of Ghana to revoke the license of bank was an act of ‘’grave injustice’’.

A statement issued by the former board the former board BoG’s action was not well grounded and now “a terrible precedent” that “does not bode well for the future.”

“Heritage Bank was, by the Bank of Ghana’s own admission a solvent bank.  It NEVER received liquidity support from the Bank of Ghana. Its corporate governance record had never been impugned by the Bank of Ghana,” the statement said.

The Bank in assigning some of the reasons for revoking the licence of the bank said The bank’s capital appears to have come from sources which are suspicious. In the application for a banking licence, each shareholder of Heritage needed to demonstrate their “ability to subscribe to the shares” of the bank. The Bank of Ghana is not satisfied that the original sources of the bank’s capital are acceptable, in terms of section 9 (d) of the Banks and SDI Act, 2016 (Act 930) and section 1 of the Anti-Money Laundering Act of 2008 (Act 749) which requires acceptable capital to be obtained from lawful and transparent sources. Specifically:

•  The promoters of Heritage provided evidence to Bank of Ghana at the time of the application for a banking licence to the effect that an amount totaling GHC120.6 million was lodged with a local bank. The amount of GHC120 million was transferred to the bank from Agricult (a company wholly owned by Seidu Agongo, a promoter of Heritage) which funds appear to have been derived from contracts awarded to Mr.Agongo by COCOBOD and are currently the basis of criminal prosecution in the High Court of Ghana. Meanwhile, it has come to the notice of the Bank of Ghana that the bank has yet to respond to two High Court orders for disclosures relating to these and other contracts affecting the significant shareholder Mr. Agongo.

“We find it puzzling that the Bank of Ghana should now be disputing the existence of a contract between Heritage Bank’s main shareholder and COCOBOD, when the Bank, as part of its due diligence ahead of the granting of HBL’s provisional banking licence had requested and received confirmation from COCOBOD of the existence of the contractual arrangements between the COCOBOD and the said shareholder.

But the board in responding said:“Furthermore, it is even more puzzling that the Bank of Ghana would claim it has no knowledge of Mr Seidu Agongo being a shareholder of Sarago Limited. The shareholding structure of Sarago Limited is a matter of public record since it is a registered company at the Registrar-General’s Department.

“More importantly, the Bank of Ghana in its own provisional licence to Heritage Bank stated as a condition that the concentration of HBL’s shareholding in Mr Seidu Agongo and Sarago Limited be diluted within three years of the commencement of operations.

“Mr Agongo’s association with Sarago Limited was thus known to Bank of Ghana at the time of the licensing,” the statement said.

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