The former managing director of the defunct GN Savings and Loans Company, Kofi Asamoah-Siaw, has expressed outrage at the government’s decision to close the company.
In an article he wrote three years after the company closed, he noted that all assets, including vehicles, had been left to rot.
He stressed that if the government had no intention of creating long-term jobs, it did not have to shut down those created by Ghanaians.
Kofi Asamoah-Siaw also claimed that the abandoned motorcycles were assembled in Ghana by Ghanaian workers for the GN engines.
He also said that the depreciation of the cedi is a problem that the private sector could solve.
Read his full statement below;
Tuesday, August 16, 2022 marks the 3rd anniversary of the reckless decision by the Minister of Finance and his shrewd lieutenant, the Governor of the Bank of Ghana, to revoke the license of GN Savings&Loans for purely political considerations.
Besides the abandoned offices built by GN, these more than 300 vehicles and dozens of motorbikes continue to rot in an abandoned garage somewhere in Tema.
The more than 3,000 workers also remain unemployed as the government winds down its NABCO scheme.
If you don’t know how to create jobs, are you destroying what others have built or created?
Just tell me if these abandoned vehicles were bought with leaves and if the drivers were Chinese nationals.
Even the motorcycles were assembled here in Ghana by other Ghanaians working for GN Motors. Now you see how some people in the private sector know how to make the cedi stronger?
The Bank of Ghana (BoG) revoked the licenses of 23 insolvent savings and loan companies and finance companies in 2019.
Ideal Finance, GN Savings and Loans, First Allied Savings and Loans, ASN Financial Services, Midland Savings and Loans, IFS Financial Services, Unicredit Savings and Loans and Women’s World Banking Savings and Loans are among the institutions affected.
According to a statement released by the Bank of Ghana on Friday, August 16, 2019, the revocation of the institutions’ licenses became necessary as they were insolvent despite the Bank of Ghana’s engagement with them in the expectation that they would be recapitalized by their shareholders. to make them solvent.
Some of these funds were used by the two related parties to pay their clients whose investments with them had matured, while some were also used to finance road contractors and others, who claim to have worked on government projects. It is important to note that the IPCs claimed by GN are not supported by transactions that were entered into directly by GN and such contractors or the government and its entities.
They reflect transactions entered into by Ghana Growth Fund or Gold Coast Fund Management with such entrepreneurs using funds levied on GN in circumstances that violated prudential standards. The failure of both related parties to repay these funds to GN impacted GN’s capital position, eventually resulting in its insolvency and severe liquidity problems.
In addition to GN’s insolvency and liquidity issues, the Bank of Ghana uncovered other key regulatory violations such as the following:
– The institution’s adjusted net worth of negative GH¢30.70 million at the end of May 2019 indicates that its paid-up capital is compromised in violation of Section 28(1) of Law 930.
– The institution’s adjusted capital adequacy ratio of minus 61.20% at the end of May 2019 is in violation of article 29 (2) of law 930.
– Contrary to Section 64(2) of the Banks and Specialized Depository Institutions Act 2016 (Act 930), the institution’s exposure to its related party has always been above the regulatory limit of 25 % of net equity (NOF). Exposures to other affiliates were primarily payments made by the bank on behalf of these affiliates.
– The structure of GN’s balance sheet clearly shows that the bank mobilizes deposits for its related companies. The inability of these related companies to honor their obligation to GN has resulted in severe liquidity issues and contributed to their insolvency as all related party exposures are non-performing.
High non-performing loans
The institution’s high level of non-performing loans (NPLs) was mainly attributed to these related party exposures, which were never paid, thus putting its customers’ deposits at risk.
A recent Bank of Ghana investigation of GN revealed that a significant amount (62,255,516.93 USD, 718,528.59 GBP and 4,200 EUR) of depositors’ funds held with GN had been transferred to International Business Solutions (another company belonging to the Nduom Group and which is based in the United States) without any document in support of these transfers in violation of section 19 of the Foreign Exchange Act of 2006, Act 723, of Section IV of Bank of Ghana Notice No. BG/GOV/SEC/2007/4 and Bank of Ghana Notices issued August 2014 prohibiting such practices.
The company has not yet released its 2018 audited accounts contrary to Section 90(2) of the Banks and Specialized Depository Institutions Act 2016 (Act 930). Further, the company has failed to maintain accounting records in a manner that gives an accurate and reliable record of the company’s transactions and therefore has not provided a true and fair view of its operations.
GN has suspended operations in seventy (70) of its branches, including the Asylum Down head office branch and the Castle Road branch, and has temporarily suspended its entire management team without the Bank’s approval. of Ghana contrary to Article 25 (2) of Banks. and the Specialized Depository Institutions Act 2016 (Act 930), primarily due to its insolvency and liquidity issues.