A certificate has emerged in court indicating that Beige Capital Assets Management (BCAM) – a subsidiary of Beige Group Limited – was licensed by the Securities and Exchange Commission (SEC) to operate as a fund manager.
The certificate was tendered through the Attorney-General’s (A-G) first prosecution witness (PW1), who also was a lead team member of the Receiver of Beige Bank, Julius Ayivor, by Thaddeus Sory, legal counsel for Mr. Michael Nyinaku, Founder and Chief Executive Officer of the Beige Group Limited.
Mr. Sory told the trial court, presided over by a Court of Appeal Justice, sitting additionally as a High Court Judge, Mrs. Afia Serwaa Asare-Botwe, on Friday, February 17, 2013, that contrary to this piece of evidence, the witness failed to disclose that BCAM was licensed as a fund management entity.
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According to him, the witness only hid that information to support his theory that transfers that were made from customers’ accounts with the Beige Bank to the BCAM account were siphoned.
Hitherto, the counsel claimed that BCAM sourced a lot of business from Beige Bank, and therefore, monies transferred from a customer like Emmanuel Richard Ofori, amounting to GH¢4 million, were not siphoned as the witness wanted the court to believe.
According to Mr. Sory, there was proof of correspondence between the bank and the customer that the money had been invested with BCAM.
The witness said although he had seen the certificate of BCAM, he maintained that Beige Group Limited was licensed to receive deposits.
He also admitted having sighted the Certificate of Investment that was sent to Emmanuel Richard Ofori.
However, Mr. Sory equally cross-examined the witness on how Emmanuel Richard Ofori was paid GH¢500,000 of his investment in the name of BCAM at a time Beige Bank was in receivership.
Similarly, answers were demanded on how an amount of GH¢500,000 payment was made to the customer in question seven days later, but not in the name of BCAM.
The witness explained that the first GH¢500,000 was made in BCAM’s name as part of the government bailout package to affected customers of the bank, as well as to prove to the customer that it was his money siphoned to BCAM that was being paid.
He further stated that labeling of the payments made to the customer was done at the discretion of tellers who transferred the monies.
Mr. Ayivor told the court that Beige Bank, at the behest of the accused, siphoned over 10,000 depositors’ funds in various amounts, including GH¢1,000, into the account of BCAM, which is also 100 percent owned by Mr. Nyinaku.
He added that the government through a bailout package had to raise GH¢2.1 billion of taxpayer funds to pay affected customers.
Mr. Sory, on the other hand, questioned why a balance in the BCAM accounts, amounting to over GH¢58 million, was not used to settle some of the affected customers. At the same time, it had funds allegedly siphoned into its account of Beige Assets Management (BAM) amounting to about GH¢5 million and some were even GH¢2 million or less.
The witness said: “Yes. There are various amounts. There were instances 1,000 was siphoned out of customers’ accounts.”
This was followed up by a question: “Are you saying the GH¢58 million in BCAM account was insignificant to have paid some of these amounts siphoned out of customers’ accounts?
Is that what you are telling the court?”
However, Mr. Ayivor explained that between the dates April 16, 2018, when the bank was still operating, and August 1, 2018, when its license was revoked, lots of transactions might have occurred to affect the GH¢58 million.
Mr. Nyinaku is being tried on 43 counts of stealing, fraudulent transactions, breach of trust, and money laundry.
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Here are some of the questions (Q) and answers (A):
Q. Since it was not invested, why were you paying it back as an interest to Emmanuel Richard Ofori?
A. GH¢4 million was paid back to Emmanuel Richard Ofori as I just demonstrated in my statement. This was money Emmanuel Richard Ofori brought to Beige Bank, as such once Emmanuel Richard Ofori demonstrated that, indeed, he brought money to be invested in the bank, he has to be paid back that money. It is different if there is no trail, but once there is a trail, it has to be paid back.
Q. One of the duties of the Receiver is to retrieve all monies?
Q. And you have repeated so many times to this court that in your view, monies that were credited to BCAM from the bank were monies from customers?
A. That’s so.
Q. Did you ever engage BCAM in connection to these monies that were moved from customers’ accounts to BCAM accounts in the same bank?
A. Yes, we did engage some officials of BCAM on some of these subjects.
Q. Was the engagement orally or written correspondence?
A. I can’t recollect if there were any written correspondence, but I can confirm oral discussions.
Q. Can you confirmed to the court that you considered these monies siphoned from the bank you sought to recover through oral discussions?
A. The Receiver took steps to recover these monies through the legal system which is currently ongoing.
Q. In your discussions with BCAM, did you discover that it was registered as a fund manager?
A. We confirmed the registered business style of BCAM by checking their profile from the online platform of the Registrar General’s Department.
Q. Did you ever bother to find out from the Securities and Exchange Commission whether BCAM was registered as a fund manager?
A. Yes. That was done.
Q. I refer you to your testimony on paragraph 11 of your witness statement, which states that the Beige Group is not licensed to receive funds?
A. Yes. Not licensed to accept deposits.
Q. In paragraph 12 when you testified about BCAM you don’t disclosed that BCAM is licensed as a fund manager?
A. That’s so. Not explicitly.
Q. I’m putting it to you that the reason you don’t disclose is to support your theory that transfers that were made from customers’ accounts with the bank to BCAM accounts was siphoned?
A. That’s not true. The reason why the word siphoned was used to describe these transfers was because these monies were moved out of the accounts of the affected customers to the accounts of BCAM without their knowledge and authorisation.
My Lady, in any bank it is only a customer that has the authority to instruct monies to be moved out of his or her account to the account of another. The fact that officials of the bank can see monies in their accounts does not give them the authorisation to transfer these monies to another entity, in this case BCAM. Yes, so I still stand by the use of the word siphoned which has got nothing to do with the license BCAM was given to operate.
Q. In your discussions with officials of BCAM did any of them ever tell the Receiver that BCAM sourced a lot of business from the bank?
A. Yes my Lady. What was said, I just recollected the correspondence .if I may call for it is exhibit, I don’t seem to get it, but it’s a letter that is dated September 2019 from the Beige Group Limited addressed to the Receiver, if I may be indulged please?
Let’s continue, but I can speak to the letter. My Lady, what was confirmed to the Receiver was that where a customer wishes to place a deposit with the bank at an interest rate, that is the bank’s lending rate, those deposits were transferred to BCAM; that was the confirmation that the accused gave to the Receiver when asked about the purpose of all these siphonings.
Q. In the particular case of Richard Ofori, whose statement we are looking at, did you speak to him [about] Exhibit H23 in connection with his investment with BCAM?
A. Not personally my Lady. But discussions were had with him by other members of the team, and the Central Bank of Ghana before the amounts were repaid to him, and he had had to prove that indeed he brought money to the bank to be invested with the bank.
Q. In the case of the customers who interest rates cannot be supported with BCAM, did the accused explained the process to you of such customer accounts to BCAM?
Q. If you look at the document I have just given to you, the second page of it is an email from a certain Daniel.Darko@beige bankcapitalaccessmanagement. That is correct?
Q. And its subject is Emanuel Richard Ofori. Correct?
A. That’s so.
Q. And the information is FYA – meaning for your attention?
A. That’s so, and this email is dated Thursday March 22. 2018, and it was sent to. Naomi.firstname.lastname@example.org.
Q. Naomi’s attention was now being called to the certificate of investment that I had just handed over to you?
A. I’m not able to confirm by just the mere reading of this document what the specific attachment was.
Q. But can you confirm to the court whether the certificate of investment was referred to Emmanuel Richard Ofori?
A. That’s so with the certificate that was attached…
Q. You did not see this certificate in the course of your investigation?
A. I have seen the certificate. I have seen it before, and I had it at the office.
Q. This particular one?
A. Yes. I have seen it before.
Counsel: I’m tendering the document through the witness.
Prosecution: No objection.
Court: The document described as investment certificate of Emmanuel Richard Ofori is admitted with objection as Exhibit 2.
Sory: My Lady will note that we have made [a] formal application for discoveries, and we didn’t get any one of the certificates from them.
Court: Do you have documents of placement or other than certificate you can give it to them.
Q. Let’s look at the same Exhibit H1; [it] is the statement of account of an entity called Progress Savings and Loans. Can you identify the transaction by which this customer’s account was debited and that of BCAM credited?
A. Yes. It’s the transaction on Exhibit H1 dated February 28, 2018, an amount of GH¢3 million as a debit on the account of Progress Savings and Loans. This transaction reflects as a credit on the account of BCAM on the same day of 28 February 2018. The transaction reference number FT1805900318.
Q. If you look at the same Exhibit H1, you will see on the next page the transaction dated 21th May, 2018, by which the account of Progress was credited with GH¢5 million?
A. That’s so.
Q. And it is described as the repayment of the principal, and also another payment described as interest. Correct?
A. Yes, there is a transaction on the same day, described as payment of interest of an amount of GH¢747,945.21
Q. From that date onwards, May 21, 2018, the statement ends on November 15, 2018 on the following page. Is that correct?
A. Yes. This particular exhibit ends on November 15, 2018.
Q. Now from May 21, 2018 to November 2018, there is no transaction between BCAM and the bank in respect of the account of Progress. Correct?
A. I’m unable to confirm that as there are so many transactions between those two dates. So I can’t tell if there is any transaction in there that will relate to BCAM.
Q. In order to answer my question would you want some time to confirm?
A. Unfortunately, I won’t be able to do that one, because the extract of [the] BCAM statement that was tendered in support of the siphoning of the GH¢3 million from Progress Savings accounts to BCAM account ends on February 28, 2018. I will need to go back to spool from the system, transactions from BCAM account covering the period up to November 15, 2018 to be able to answer that question.
Q. I put it to you once again that your previous answer that a detailed statement of BCAM was irrelevant for the purposes of this case is not correct?
A. I did not say that. What I said was that portions of BCAM’s statements relevant to specific transactions under discussions were extracted, and, my Lady, there was a subsequent request for the entire BCAM statement, which we have already provided the court. So the full complement of BCAM statement, from inception to where it ended, is available. If I’m given those statements now I can check and answer the question.
Q. But Exhibit H series; every time we look at a customer’s account, we locate the debt in the customer’s account, and then match it to the correspondence credit in BCAM accounts?
Q. So if you look at Exhibit H1, you should be able to find May 21, 2018 to November 2018, whether there have been such debits to the account of BCAM?
A. On Exhibit H1, which is an extract of Progress Saving and Loans accounts with Beige Bank, there are debts and credits, but those debts and credits will not necessarily relate to transfers to the account of BCAM or vice versa.
So I’m unable to tell if any of those debits and credits of the accounts of Progress Saving and Loans covering those periods will have a corresponding leg as Exhibit H, which has an ending of 28th February, 2018.
Case adjourned to February24, 2023.