Ex-Beige Bank Boss Siphoned Depositors’ Funds – Witness

THE FIRST prosecution witness in the trial of former Chief Executive Officer of defunct Beige Bank, Michael Nyinaku, has told an Accra High Court about how the accused siphoned funds of depositors into various fictitious accounts and companies owned by him.

The witness, Julius Ayivor, a Chartered Accountant and a leading member of the team put together by the Receiver of the defunct bank to review accounts of the bank, outlined the dubious manner in which Mr. Nyinaku transferred depositors’ funds without their consent, leading to the collapse of the bank, and causing the Government of Ghana to spend GH¢2.1 billion in repaying the depositors as part of a bailout package.

Led in his evidence-in-chief by Evelyn Keelson, a Chief State Attorney, the witness told the court: “The reviews conducted by the team identified a number of transactions that were suspicious and unusual in nature. The suspicious and unusual items involved siphoning funds that had been deposited by customers with the bank by the accused person to himself and companies related to him which have to date not been paid back to the bank.”

Michael Nyinaku has been charged with 43 counts of stealing, fraudulent breach of trust and money laundering, for allegedly stealing a total of GH¢1,212,684,783.46 from the defunct bank between 2015 and 2018.

Julius Ayivor, in his testimony, told the court that the suspicious and unusual transactions uncovered during the review of the defunct bank’s accounts include the transfer of customer deposits to a fictitious account opened in the name of First Africa Savings and Loans Limited (FASL), the transfer of customer deposits lodged with Beige Bank to Beige Capital Asset Management Limited (BCAM) without the customers’ consent.

Other fictitious transactions also included the transfer of customer deposits lodged with Beige Bank to The Beige Group Limited (Beige Group), a limited liability company wholly owned by the accused, without the customers’ consent, and the transfer of Beige Bank’s funds to the accused person, a shareholder and the Managing Director (MD) of the bank, and companies related to him.

Explaining further, the witness told the court that in March 2018, a fictitious second account was opened in the name of FASL at the blind side of its board and a total of GH¢320 million was transferred from the accounts of Beige Bank’s customers into the account of BCAM and was later transferred into the fictitious account that had been opened in the name of FASL.

Mr. Ayivor said the accused person subsequently approved the transfer of a total of GH¢21.12 million to be siphoned out of the fictitious FASL account to the accounts of two individuals and 10 companies held with Beige Bank, nine of which are related to him.

The witness also disclosed another amount of GH¢281,882,953,37 of Beige Bank’s funds, mainly made up of customer deposits that were siphoned out on the instructions of the accused person to himself, companies ultimately owned by him and other third parties.

These transactions, he said, were recorded in “other assets” general ledger accounts of Beige Bank under Directors Account; Shareholders Account; Beige Group Account; and Prepayments: Project Works Account.

“There was no evidence that the accused person or any of the recipients provided any consideration to Beige Bank in exchange for these payments, and the total amount has to date not been refunded by the accused person or any of the other recipients to Beige Bank,” the witness added.

He also told the court that over 10,000 deposits that various customers had placed with Beige Bank were transferred from their accounts with Beige Bank to BCAM, on the instructions of the accused person without the customers’ consent.

“As at August 1, 2018, the total outstanding principal balance of customer deposits that had been transferred to BCAM amounted to GH¢448,636,210.21, made up of transfers of GH¢23,610,202.31 in 2017 and GH¢425,026,007.90 in 2018,” Mr. Ayivor disclosed.

He added that the amount utilised by BCAM out of these transfers remain unpaid, and the government had to pay these depositors through the bailout package.

Mr. Ayivor also tendered documents evidencing the transfer of GH¢141,042,348.92 from Beige Bank to Beige Group on the instruction of the accused person, which remain unpaid and had to be paid by government through the bailout package.

An example of such deposit was a GH¢20 million fixed deposit placed by Tobinco in March 2018, which was diverted into the bank account of Beige Group.

The witness tendered over 80 documents made up of the list of customers whose deposits were transferred to BCAM, e-mails from the accused person authorising the transfer of customer deposits without customers’ consent, letters from customers indicating that the transfers were made without their consent, the accused person’s response to an enquiry from the Receiver in which he confirmed that such transfers of customer deposits were generally and routinely made from Beige Bank to BCAM and Beige Group.

SOurce: DGN


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