Beige Bank CEO charged with stealing and money laundering

Chief Executive Officer of the collapsed Beige Bank, Michael Nyinaku has been charged with two counts of stealing and money laundering.

He has been accused of stealing a sum of over GHC 340 million.

He has subsequently been handed a one week remand in police custody by an Accra Circuit Court as investigations into the issue continue, ABC News can report.

This was after the lawyer for the accused failed to secure a bail for his client even though he had argued among  that Mr. Nyinaku is a “law-abiding citizen” and “not a flight risk.”

Mr. Nyinaku is before court for his alleged role in the collapse of Beige Bank.

The Bank of Ghana in 2018 revoked the licence of Beige Bank on the account that the license was obtained fraudulently.

Below is a Bank of Ghana report on Beige bank in August 2018 following its collapse

The Beige Bank commenced banking operations in December 2017 after operating as a savings and loans company since.

A special examination conducted by the Bank of Ghana into the affairs of the bank six months after the commencement of its operations revealed that:

  • Funds purportedly used by the bank’s parent company to recapitalize were sourced from the bank through an affiliate company and in violation with regulatory requirements for bank capital. In particular, an amount of GH¢163.47 million belonging to the bank was placed with one of its affiliate companies (an asset management company) and subsequently transferred to its parent company which in turn purported to reinvest it in the bank as part of the bank’s capital.

The placement by the bank with its affiliate company amounted to 86.86% of its net own funds as at end June 2018, thereby breaching the regulatory limit of 10%. Furthermore, the purported use of the same funds by the parent company of the bank to reinvest in the bank was in contravention of the Bank of Ghana’s requirements for bank capital. Also, the bank has not been able to recover these funds for its operations.

  • The bank persistently breached the cash reserve requirement (CRR) of 10% (CRR at 23 July, 2018 was 1.97%) since the beginning of January 2018;
  • The quality of the bank’s loan portfolio had seriously deteriorated resulting in a Non-Performing Loans Ratio (NPL) of 72.80%;

The bank’s Capital Adequacy Ratio (CAR) was assessed to be negative 17.18% as against the regulatory minimum of 10%, thus, recording a capital deficit of GH¢159,162,557.64, rendering the bank insolvent.

 

Source: ABCNewgh.com

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