Capital Bank case: Ato Essien sentenced to 15 years in prison

The high court in Accra, presided over by Justice Eric Kyei Baffour, a Court of Appeal judge sitting with added responsibility as a high court judge, has sentenced the convict William Ato Essien, a former chief executive officer of the defunct Capital Bank, to 15 years in prison for failing to meet the terms of an agreement reached with the Attorney General.

The Attorney General hauled Ato Essien back to court, praying the judge to impose a custodial sentence on the convict for failing to comply with the payment terms he reached with the state after his conviction.

Essien paid GHC30 million out of GHC90 million owed the state upfront and agreed to pay the remaining GHC60 million in three instalments, the first being due on 28 April 2023.

However, the convict failed to make good the first instalment of GHC20 million on the agreed date. His failure to abide by the terms of the settlement triggered the action by the Attorney General, who prayed the court to commit Essien into prison custody, in line with the provisions of Section 35 (7) of the Courts Act 1993 (Act 459), which states:

“Where a person convicted under this section defaults in the payment of any money required of the person under this section or fails to fulfil any condition imposed by the court under subsection 6, any amount outstanding shall become due and payable and upon failure to make the payment, the court shall proceed to pass a custodial sentence on the accused.“

In court

When the court convened today (12 October 2023), the lawyer for William Ato Essien, Baffour Gyau Bonsu Ashia, told the court that his client has not yet been able to pay the sum agreed and that he would require more time to be able to make good his promise.

“My Lord, we have not been able to pay the agreed sums. At the last two sittings a letter had been written from the office of Robert Akya informing the court that they have gotten a judgment against Essien Swiss international, for which reason they had an interest in the properties which Essien Swiss had assigned to Panarico Company Ltd.

“We took steps and realised that it is true that they had secured judgment against Essien Swiss. This piece of information forced Panarico to cease payment as agreed under the sale of assets agreement between Essien Swiss and Panarico Co Ltd.

“My instructions are that steps were taken to engage Kuy Travel & Tours, the creditor, to remedy the issue. As I speak, there is an appeal pending against the judgment of the high court.“It is our humble prayer that because of the steps which the convict has taken to pay more than one-third of the money so far, the court should indulge us and grant us more time in order to pay the outstanding.

“We are not taking advantage of the leniency showed us by the court. It is because of the practical challenges faced by the convict,” Baffour Gyau Bonsu Ashia told the court.

By court

After hearing the parties, Justice Eric Kyei Baffour’s court ruled that, looking at all that had transpired in the course of the whole previous legal year and throughout the vacation period, the court has concluded that the convict (Ato Essien) is not in a position to make any further payments apart from the GHC37 million already paid out of the GHC90 million agreed upon.

“The court did not sit for two months and the convict, if he was in the position to pay any extra amounts, would have done so,” the court said. “The convict pleaded guilty to all 16 counts of conspiracy to steal, stealing and money laundering. The huge sums of money involved were taken from Capital Bank in a manner that led to its collapse.

“These monies taken from the bank cannot be seen as one of the many stealing cases. They were executed as an opportunistic theft. He [Ato Essien] demonstrated sheer greed in his desire to own another bank, Sovereign Bank, aside from Capital Bank.

“The court is not unaware that an amount of GHC37 million has been refunded to the Republic after conviction. He pleaded guilty after he wasted the court’s time [for] three years and caused the Republic to parade 17 witnesses.

“Countless numbers of innocent citizens lost their jobs and are still job-hunting. Huge sums of money had to be spent by the Republic to repay the customers of the bank.

“In the light of this, I impose custodial sentence on the accused as follows: conspiracy to steal GHC100 million, ten years in hard labour (IHL); stealing GHC100 million, 15 years IHL; money laundering of GHC100 million, four years IHL; conspiracy to steal GHC30 million, ten years IHL; stealing GHC30 million, ten years IHL; money laundering, two years IHL; stealing of GHC35 million, 11 years IHL; stealing of GHC2 million, two years IHL; stealing GHC12 million, eight years IHL; money laundering, two years in IHL; stealing of GHC8.5 million, seven years IHL; money laundering, two years in IHL.

“All the the sentences imposed by the court are to run concurrently,” Justice Eric Kyei Baffour’s court ruled.

Background

In all, the state called 17 prosecution witnesses throughout the case.

Among the witnesses were Vish Ashiagbor, one of the receivers appointed to wind up Capital Bank; Michael Kwame Amoako-Atuobi, a former relationship manager for Capital Bank; Emmanuel Kontoh Arthur, a former general manager in charge of treasury at Capital Bank; and Sharon Okwaa Boateng, a former supervisor of the cash management unit at Capital Bank.

Others called to give witness were Benone Yaw Asihene, a former special assistant to the bank’s executive committee; Donatus Kwesi Freitas, an officer of the Bank of Ghana; Daniel Gaikpah, the former chief banking officer in charge of operations with Capital Bank; and Lawrence Otoo, a banker.

The remaining witnesses were Felix Koranteng-Asante, a businessman who dealt in installation of CCTV cameras; Peter Amadu Iliasu, the former chief executive of All Time Capital Ltd; Aseye Seyram Komla Akotia, a former vice-president in charge of investment with All Time Capital Bank; Kwame Achampong Kyei, a former chairman of Sovereign Bank; Edem Bart Williams, a former chief executive officer of Nordea Capital; Ali Seidu, the chief executive officer of Maripoma, Volta and Impex Ltd; Teddy Friko, assistant to Ali Seidu; Chief Superintendent Ernest Frimpong of the Special Investigations Team; and Joseph Oppong, the investigator.

Facts of the case

According to the fact sheet, “The first accused person, William Ato Essien, was the majority shareholder of Capital Bank Ltd (Capital Bank), a wholly owned Ghanaian bank which previously operated as a microfinance company.

“The second accused person, Tetteh Nettey, was the managing director of MC Management Services, a company established by the first accused person purposely for the promotion of the incorporation of Sovereign Bank, another brainchild of the first accused person.

“The third accused person, Fitzgerald Odonkor, was the managing director of Capital Bank from June 2015 to August 2017 and the fourth accused person, Kate Quartey-Papafio, is a businesswoman and chief executive officer of Reroy Cables Company Ltd.”

The facts further state: “Between June 2015 and November 2016, pursuant to an application by Capital Bank, the Bank of Ghana (BoG) provided a total sum of GHC620 million as liquidity support to Capital Bank to enable it [to] meet its capital adequacy ratio and to enable it [to] service its maturing debt obligations.

“In October 2015, the first accused person, aided by the third accused person, caused a transfer of a sum of GHC120 million of the liquidity support amount to All Time Capital Limited (All Time), an investment management and advisory firm.

“At the instance of the first, second and third accused persons, GHC100million of the GHC120 million which had been transferred to All Time was further transferred to MC Management Services, while GHC20 million of the amount of GHC120 million was transferred to Pronto Construction and Supplies Ltd (Pronto Construction).

“The sum of GHC100 million which was transferred to MC Management Services was subsequently represented by the second accused person to BoG 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, at the instance of the first and third accused persons, GHC65 million out of the BoG liquidity support of GHC620 million was transferred to Nordea Capital Ltd, described as an investment bank.

“Of the amount of GHC65 million, the first accused person, aided by the third accused person, caused GHC30 million to be transferred to MC Management Services, which was represented to BoG as additional initial capital of Sovereign Bank by the second accused person.”

The facts further state: “With the aid of the third accused person, the remaining GHC35 million of the GHC65 million was paid into a Fidelity Bank account of Brietling Services, a company also established by the first accused person.

“At the request of the first accused person, 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 the first accused person.

“The total amount of GHC130 million which was represented as initial capital of Sovereign Bank was eventually channelled by the first and second accused persons into Capital Africa Group, the first accused person’s company, less bank charges.

“The monies transferred into Capital Africa Group were eventually dissipated by the first and second accused persons.

“Between June 2015 and October 2016,” the facts further state, “the first accused person, with the support of the third accused person, appropriated a total of GHC27.5 million of the liquidity support, which was conveyed in jute bags to the first accused person and purportedly used as payment for business promotion.

“In June 2017, in furtherance of the conversion of portions of the GHC620 million liquidity support, the first accused person 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 Ltd, Hardwick Ltd and Volta Impex Enterprise Ltd – 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, the first accused person prevailed on the managing director of the companies to submit copies of Government Payment Certificates of the three companies valued at GHC135 million to be discounted to GHC105 million by Capital Bank, to be used as collateral for the purported loan of GHC100 million.

“The first accused person 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 the fourth accused person’s account with CalBank Ltd.

“The first and fourth accused persons subsequently caused the amount of GHC70 million in the Cal Bank account of the fourth accused person to be further transferred into a personal account of the fourth accused person purposely opened at Capital Bank to receive the amount.”

The fact sheet summed up the case as follows: “Some time in 2017, after Capital Bank had gone into receivership, the fourth accused person, even though fully aware that Capital Bank had gone into liquidation, attempted to withdraw the whole amount of GHC70 million which had been lodged in her personal account with Capital Bank but was however prevented from doing so by the receiver.”

Reporting by Wilberforce Asare in Accra

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