William Ato Essien, Founder of collapsed Capital Bank, has told an Accra High Court (Commercial Division) that his institution met all the requirements of the Bank of Ghana (BoG) before being granted the liquidity support.

Mr Ato Essisen is standing trial with Tetteh Nettey, Fitzgerald Odonkor and Kate Quartey-Papafio for serious financial breaches, hence being slapped with 26 charges.

However, through Mr Ato Essienc defence counsel, Thaddeus Sory (Esq), Justice Eric Kyei Baffour, a Court of Appeal judge sitting as an additional judge of the High Court was informed that the BoG was satisfied and that was why it gave the liquidity support to Capital Bank.

Lawyer Sory made this known while conducting cross-examination Thursday on the Attorney General’s first prosecution witness (PW1), Vish Ashagbor, who also doubles as one of the Directors of Price Waterhouse Coopers (PWC) and Receiver of the collapsed banks.

Mr Sory said before the Apex Bank considers any financial institution’s application for liquidity support, it will first has to evaluate such application before the support is given.

Similarly, the Central Bank would also consider whether the applicant bank has security that in the event of default, it [BoG] can fall on.

According to him, the now defunct Capital Bank met all those requirements, for which it merited the liquidity support.

Mr Ashagbor confirmed to the court that Mr Sory’s assertion was a true statement.

Little excerpts of questions [Q] and answers [A]

Q: If you take a look at the report attached to your witness statement (Exhibit ‘VV V’ series), you would agree with me that, it focuses to a very large extent, on the liquidity support given to Capital Bank by the Bank of Ghana?

A: Yes my Lord. 

Q: Now, the liquidity support which the Bank of Ghana gives banks, is usually applied for by these banks. Is that correct? 

A: Yes. 

Q:  And the Bank of Ghana evaluates the application and decides whether or not to provide this liquidity support?

A: Yes, that is my understanding of what actually happens.

Q: Among the matters that the Bank of Ghana would be considering, for purposes of deciding whether or not to provide this liquidity support is, whether the bank which applied for that support has security that the Bank of Ghana can fall upon in the event of default? 

A: Yes my Lord. My understanding is that, that is one of the considerations. 

Q: So in the case of Capital Bank, the Bank of Ghana definitely requested security for the liquidity support the bank asked for. Is that correct? 

A: Yes, that is my understanding. 

 Q: And your understanding also must be that, the Bank of Ghana was satisfied, and that was why it gave the bank liquidity support? 

A: Yes, my Lord.

Q: And so from your testimony so far, liquidity support given by the Bank of Ghana to a bank, in this case Capital Bank, is in the form of a loan given to the bank? 

A: That is right. 

Q: So this therefore constitutes a creditor-debtor relationship between the Bank of Ghana and the bank? 

A: That is right. 

By Akutu Dede Adimer