Otabil, ICGC still in court over Capital Bank collapse

After the sentencing of William Ato Essien, the founder of the now-defunct Capital Bank by an Accra High Court, questions have arisen about why other key figures in the bank were not similarly prosecuted. Notably, the name of Dr. Mensah Otabil, who chairs the International Central Gospel Church, has been prominently mentioned.

However, it’s important to note that although no criminal charges have been filed against Dr. Otabil, he and 14 others have been the subject of a civil action initiated by the Receiver of the defunct bank since 2019. Among the 14 individuals are William Ato Essien, Oheneba Osei Akoto, Stephen Enchill, Kingsley Atta Ghansah, Otabil and Associates, International Central Gospel Church (ICGC), Kwadwo Ayisi Ahwireng, Isaac Osah Thompson-Mensah, and John Kofi Mensah, who are all shareholders of the defunct company. Additionally, Fitzgerald Odonkor, Amadu Montia, Kofi Kwakwa, and Francis Adu-Mante, who were directors of the company, are also included in the civil action.

The civil action aims to recover more than 800 million cedis from these individuals. For instance, the High Court has been asked to recover outstanding sums related to Mr. Essien’s companies. The court is also tasked with recovering 51 million cedis from ICGC.

The allegations primarily revolve around fraud. The Receiver contends in court documents that the Directors of the defunct bank approved loans and the placement of funds to themselves and related parties without the required collateral and in violation of the company’s internal policies, relevant banking regulations, and Ghanaian Company law. Furthermore, the directors are accused of overseeing the disbursement of liquidity support (amounting to 620 million cedis) granted by the Bank of Ghana, contravening banking regulations and guidelines issued by the Central Bank. A specific instance highlighted in court documents is the transfer of 130 million cedis to All-Time Capital from this liquidity support during a board meeting in October 2015. Dr. Mensah Otabil, the Chairman of the Board at the time, had allegedly assured management that he would personally ensure the funds were repaid by March 31, 2016, which remains outstanding.

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The Receiver has leveled accusations of fraud against these Directors and Shareholders, emphasizing that they approved the purchase of Commercial Paper from related companies without adhering to regulations. The Receiver contends that these instruments, described as Commercial Paper, were not suitable for such a classification and were essentially a scheme to divert funds from the bank.

The legal proceedings have been subject to delays, partly due to legal actions taken by William Ato Essien. He obtained court approval to challenge the revocation of the bank’s license by the Bank of Ghana, causing a pause in the High Court case. The debate extended to the Court of Appeal, where Mr. Essien’s challenge was successful, allowing him to contest the actions of the Bank of Ghana within the same lawsuit.

The High Court has scheduled November 21 for legal arguments to determine whether the Receivers have the authority to pursue the legal action, considering that the bank’s assets now belong to GCB Bank.

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