Julius Ayivor, a leading team member of the Receiver and First prosecution Witness (PW1), in the trial of Michael Nyimaku, founder and CEO of Beige Group Limited, has demystified why the latter had it wrong for engaging a subsidiary company in the management of customers’ investments exceeding Beige Bank lending rate.

He explained to the trial court while under cross-examination by Thaddeus Sory, defence counsel for Mr Nyimaku, that when a customer of a bank deposits funds for investment beyond the bank’s lending rate, the bank should have done the honourable thing of telli g the customer that “we are sorry, we cannot place this investment at that investment rate.”

However, if the bank so wish, it should have refer the customer to another entity capable of managing the investment at the customer’s interest expectation but not transferring the fund to a subsidiary company controlled the same CEO.

According to Mr. Ayivor, “If that happens, it would be siphoning money from the account of that customer to another entity to the benefit of the CEO. With all the examples provided when the accounts of the customers were debited the amount of BCAM was credited, given BCAM access to those credit.

All those credits were appropriated by BCAM and balance has only over GH¢500,000 and some perwas from August 9, when the licence was revoked.”

Mr. Sorry, in the other hand, explained to the High Court, presided over Justice Afia Serwaa Asare-Botwe, yesterday, the rational behind the transfers of depositors’ funds to the account a subsidiary company, Beige Capital and Asset Management (BCAM).

He said there was an agreement between BCAM and Beige Bank to the effect that depositors’ funds with bank would be transferred to former, if the investment interest exceeds the banking borrowing rate.

The counsel added that this was explained in his client’s response to the Receiver’s query, prior to the bank license revocation and placing in receivership.

Mr. Ayivor, in response, said the statement is  not entirely correct because the answer provided by Mr. Nyimaku although indicated that Beige Bank had an agreement with BCAM, the decision was wrong at the first place.

PW1 said depositors funds that were transferred to BCAM came at a cost above the bank’s borrowing rate, which required another entity to be engaged.

He continued: “He (Mr. Nyinaku) did not say they had an agreement with BCAM, where they will transfer customers deposits to BCAM.”

The court was informed that the murky part of Beige Bank and BCAM dealings was how BCAM after receiving the funds, also transferred same into a fititious account with First Africa Savings and Loans, with a volume of over GH¢200 million.

He told the court that a total of GH¢448,636,210.21 of depositors’ funds were siphoned into BCAM without the bank’s customers knowledge or instructions.

This answer was followed by a question from the counsel: “From your understanding of what the accused (Mr Nyimaku) said could these deposits come from any other place apart from the bank?”

Nevertheless, the witness indicated that the funds were customers deposits held with the bank and those funds are not the bank’s deposits.

Meanwhile, the counsel also maintained that  the Accused  have explained to Receiver, how customers deposits with the bank were transferred to BCAM but PW1 explained the circumstances leading to the transfers were the challenge.

Background

Mr. Nyinaku has been charged with stealing, fraudulent breach of trust and money laundering, which he denied in Court.    His Beige Bank license was revoked by the Bank of Ghana on August 1, 2018, and placed it in receivership.

A review of the financial and other records of the bank conducted by the Receiver and his team identified several suspicious and unusual transactions which was subsequently reported to the law enforcement agencies for investigations.

The facts before the trial court indicated that between 2015 and 2018, the accused person as CEO of the Bank used various means to transfer huge sums of monies to companies related to him and for his personal benefits.

The fund transferred to BCAM were depositors’ funds lodged with the Beige Bank.

Thus, between 2017 and 2018, Nyinaku caused the transfer of GHC10,071.00 fixed deposit account held with Beige Bank in which various customers placed a total of GHC448,636,210.21 to Beige Capital Asset Management Limited (BCAM), without the knowledge and consent of these customers.

BCAM is a limited liability company wholly owned by the Beige Group Limited (Beige Group), an entity which in turn is wholly owned by the accused person.

Investigations also revealed that the accused person between 2017 and 2018 caused the transfer of 35 fixed deposit investments of 23 customers of Beige Bank valued GH¢141,042,348.92 to the Beige Group, a Company wholly owned by the accused person and its majority shareholders of Beige Bank.

Further investigations revealed that in March 2018, the accused person caused a fictitious second account to be opened in the name of First African Savings and Loans (FASL), an existing account holder with Beige Bank, without the knowledge of the board and management of FASL.

According to the facts, the accused person then caused the transfer of the sum of GHC320 million from the accounts of various Beige Bank customers into the bank accounts of BCAM held with Beige Bank.

The GH¢320 million was subsequently transferred from the BCAM account held with the Beige Bank into the fictitious FASL account that had been opened in Beige Bank’s books on the instructions of the accused person.

Therefore, between March 2018 and August 2018, GH¢21,123,270.96 out of the GHC320 million was transferred from the fictitious FASL bank account to some two individuals and ten companies, nine of which are related to Nyinaku, on his instructions.

Again, between 2015 and 2017, the accused person through the use of payment vouchers, caused the sum of GH¢1,465,000.00 of depositor’s funds lodged with Beige Bank to be paid to himself and other persons, the Court heard.

These transactions were recorded in a general ledger account of the bank described as Directors’ account, adding that it came out that the accused person through the use of payment vouchers, e-mails and memos, caused a total of GH¢20,599,052.58 of depositors’ funds lodged with Beige Bank to be transferred to a number of a general ledger account of the bank described as shareholders’ account.

Additionally, between 2016 and 2017, the accused through the use of payment vouchers, caused a total amount of GHC141,742,087.70 of depositors’ funds lodged with Beige Bank to be transferred to a number of companies and individuals for his benefits, he said

These transactions were also recorded in a general ledger account of the bank described as Beige Group Account.

The Court heard that investigations had established that the money the accused allegedly dishonestly appropriated by the accused person from the Beige bank remained unpaid as at August 1, 2018, when the Bank’s license was revoked by BoG.