Defunct Heritage Bank Workers Laid Off, Branches Shutdown

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The Receiver of defunct Heritage Bank, Vish Ashiagbor has directed that all branches of the bank across the country to ease operations except the Tema Community 1, and Suame – Kumasi branches.

A letter by Vish Ashiagbor sighted by Citi Business News said “Consolidated Bank Ghana will cease to operate the former branches of Heritage bank after close of business on Thursday, 28 February 2019”.

It added that “unless specifically requested, all the Receiver’s consultant staff will no longer be required to physically report to work at the former branches or Head Office daily”.

The workers have been promised allowances in line with the consultancy contracts for the term of the contract which ends on March 31, 2019.

BoG revokes Heritage license

The Bank of Ghana revoked the license of Heritage Bank after it discovered a number of anomalies relating to its licensing, the sources of its capital, and related party transactions.

Providing reasons for the revocation of the license, the central bank said Heritage bank’s capital appears to have come from sources which were suspicious.

According to the Bank of Ghana, the shareholders of the bank were specified as Mr. Seidu Agongo, Ms. Fatima Adamu, Sarago Limited, and Mr. Sylvanus Kotey who together purportedly met the minimum paid-up capital of GHC 120 million.

The Bank of Ghana said it was 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.

The central bank concluded that pursuant to sections 9 and 12 of Act 930, the majority shareholder of the bank, Mr. Agongo, does not meet the “fit and proper person” test, adding that the bank failed to meet the ¢400 million capital required as of 31st December 2018.

Heritage Bank replies

Meanwhile, the Board and lawyers of the majority shareholder of Heritage Bank, Seidu Agongo have contested the reasons given by the bank of Ghana for the revocation of the license describing it as unfair and a setting of a bad precedent.

They argued that it is 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 provisional banking license, had requested and received confirmation from COCOBOD of the existence of the contractual arrangements between COCOBOD and the said shareholder.

They added that in their engagement with the Bank of Ghana including the Governors on numerous occasions, ALL in relation to meeting the capital requirement, at no time had the issues being given as grounds for the revocation of the bank’s license been raised.

The board of Heritage Bank stated that by the Bank of Ghana’s own admission, the bank was solvent and never received liquidity support from the Bank of Ghana which showed that its corporate governance record had never been impugned by the Bank of Ghana.

—citibusinessnews

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