Gov’t does not owe GN Savings and Loans – BoG

By on

The Bank of Ghana has rejected viral claims, GN Savings and Loans company collapsed because government failed to pay debts it owed the company.

Deputy Director of Banking Supervision at the Bank of Ghana, Elliot Amoako said it is other companies within Groupe Nduom which owed the now defunct institution.

Chairman of Groupe Nduom, Dr. Paa Kwesi Nduom who is a celebrated entrepreneur and a three-time presidential candidate has lamented government’s indebtedness caused his subsidiary’s demise.

The Groupe is at loggerheads with government over the size of the debt. The Finance ministry has said government owes Groupe Ndoum ¢30million. But the conglomerate puts the debt at ¢300million.

Groupe Nduom has said one of its subsidiaries, Gold Coast Securities, is owed¢2.2billion after financing several infrastructural projects.

Explaining matters, Elliot Amoako told the Joy FM Super Morning Show, GN Savings & Loans (formerly GN Bank) was used to finance its sister companies within Groupe Nduom.

Some figures released by the central bank showed that then GN bank put more than¢761million into sister companies Ghana Growth Fund and Gold Coast Fund Management Limited.

It was these affiliate companies which made ‘risky’ investments with government leading to unpaid debts, he told Malik Abass Daabu.

He said these affiliates should have balanced their risk-taking without exposing depositors and their clients. It is the failure to do so that has indirectly affected the cash cow – GN Savings & Loans.

 

The Bank of Ghana, he explained, sympathised with GN Bank which was why it was downgraded to a Savings and Loans Company in January 2018.

This was to allow the downgraded entity to resolve its debt problems directly with its affiliates and indirectly with government but GN Savings & Loans has not been able to do so, Elliot Amoako said.

The central bank, he said, has a duty to protect depositors who had been frustrated with GN Savings & Loans inability to honour its obligations. The required minimum operating capital of 15m cedis had been impaired, the top official explained.

Its Capital Adequacy Ratio (CAR) which indicates a company’s ability to meet is financial obligation had reached -61%, in breach of the minimum required of 13%, the central bank has said.

The revocation of the licence was important to protect depositors, the deputy Director at Bank of Ghana stressed.

Elliot Amoako also faulted the business model of Groupe Nduom in using depositors funds at erstwhile GN bank to finance its other companies. It is “problematic”, he said, describing it is bad governance frowned upon by Ghana’s banking norms.

 

-Joy

ABOUT: Nana Kwesi Coomson

[email protected]

An Entrepreneur, Corporate Communications Executive and Philanthropist. Editor-in-Chief of www.233times.com. A Senior Journalist with Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. He holds first degree in Bachelor of Arts from the University of Ghana; Political Science (major) and History (minor). In 2015, he won a £35,000 postgraduate scholarship to study MSc Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) at the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow who studied at Clark Atlanta University in USA on the Business and Entrepreneurship track. His mentors are Rupert Murdoch, Warren Buffet, Sam Jonah, Kwaku Sakyi Addo and Piers Morgan

view all posts by: Nana Kwesi Coomson  

Leave a Reply

Your email address will not be published. Required fields are marked *

ABOUT 233TIMES

233times.com is a Ghanaian media house which serves as a major source of exclusive interviews ,music and video downloads, news and more.

233times.com reports on major events,news covering entertainment, politics, sports, etc from within Ghana, Africa and beyond.

We have a platform for the amateur artistes to portray their staggering talents ...more...

WE ON SOCIAL MEDIA. FOLLOW US

facebook twitter youtube google plus linkedIn

To advertise with us or make enquiries, please visit 233times.com/advertise or call +233266121799 (Selorm), +233248185848 (Nana Kwesi)