July 19, 2024
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Beige Bank case: Gifty Afenyi Dadzie was untruthful to the police investigators ~ Defence lawyers to Court

Defence lawyers in the case in which the founder of defunct Beige Bank is standing trial have told the High Court in Accra that former Managing Director (MD) of the First Africa Savings and Loans (FASL) and a leading member of AGLOW Ghana, Mrs. Gifty Afenyi Dadzie concealed information from police investigators to have their client implicated.

According to the defence lawyers led by Thaddeus Sory, Mrs. Afenyi Dadzie who was then MD of FASL did not make full disclosure of information on the status of the sale of FASL to The BEIGE Group when she met the investigators during investigation.

Mr Sory said Mrs Dadzie “was definitely untruthful” to the Commercial Crime Unit (CCU) and Special Investigation Team (SIT) during the investigation processes.

“I am further putting it to you that linking Exhibits 20, 23 and 25, Mrs. Gifty Afenyi-Dadzie was definitely not truthful to you and your investigation team when she represented herself and Kwabena Bonsu as representing the management team of FASL to the exclusion of the Beige Group officials,” Mr Sory put to ASP Abednego Atsah, the Fifth Prosecution Witness in the ongoing trial.

The Witness in his response said, “We asked her to volunteer statements out of her own volition which she did.”

The Beige Bank was said to have entered agreement with FASL to acquired 90% of the shares of FASL as per share purchase agreement signed between the beige group Ltd and first Africa group.

Following this, Beige made a payment of GHS 7m being the cedi quivalent of USD 1.6m as part payment of the purchase consideration which then was USD2.5m.

This USD1.6m was paid directly to First Africa Group, the outgoing and now minority shareholders.

Subsequently The BEIGE Group made a further investment of an amount of GHS9m directly into FASL meant to increase the stated capital and boost the working capital of FASL since BEIGE had now become the majority shareholders and controllers of FASL.

It turns out that all this while, Gifty Affenyi Dadzie and Kwesi Tetteh Dadzie of First Africa Group had represented to BEIGE that they had secured all relevant approvals from the Bank of Ghana when in fact they hadn’t. This representation had expressly been stated in the sale and purchase agreement signed by both parties.

Mr Sory while while subjecting ASP Abednego Atsah, the investigator in the matter to further Cross-Examination before the Financial and Economic Division of the Accra High Court presided over by Justice Afia Serwah Asare-Botwe, said Mrs Afenyi Dadzie always knew that those Beige Group officials who worked with FASL had access to the letterheads of FASL and did not have to forge them.

ASP Abednego Atsah, the Fifth Prosecution Witness in the ongoing trial, said Mrs. Afenyi Dadzie did not mention that.

The Investigator, ASP Abednego Atsah, the Fifth Prosecution Witness in the ongoing trial had his Witness Statement given on December 8, 2022 adopted by the Court as his Evidence-in-Chief including various exhibits on July 7.

His evidence to the Court presided over by Justice Afia Serwah Asare-Botwe, a Justice of the Court of Appeal sitting as an additional High Court judge is to corroborate the Prosecution’s charges that have been leveled against Mr. Michael Nyineku.

Mr. Michael Nyinaku, the founder and Chief Executive Officer of the defunct bank, has been accused of allegedly siphoning customers funds and has been charged for stealing GH¢2.1 billion of depositors’ money from the bank.

He has pleaded not guilty to 43 charges including stealing, fraudulent breach of trust and money laundering and has been granted bail.

Justice Asare-Botwe, a Justice of the Court of Appeal sitting as an additional High Court judge has adjourned the case to July 21, 2023.

CONTINUATION OF CROSS EXAMINATION OF PW5 BY MR. SORY

NB: Q for Question and A for Answer

Q: Take a look at this document I have handed over to you, are these the documents the court ordered you to disclose to the accused person on the last adjourned date?

A: Yes my lady. These are the administrative records submitted.

Mr. Sory: My lady we want to tender through the witness the administrative records as ordered by the court on the last adjourned date.

By Court: Any objection?

Mrs. Keelson: My lady there will be no objection.

BY COURT

The documents are admitted without objection as Exhibit 29.

Q: In your testimony on the last adjourned date, you told the court that your investigations revealed that after Exhibit 20 was signed between the Beige Group and the First African Savings and Loans (FASL), the parties were awaiting BOG’s approval, do you recall that?

A: That is correct.

Q: Take a look at paragraph 15 of Exhibit 20 and read it to the hearing of the court.

A: The witness reads paragraph 15 of Exhibit 20 to the hearing of the court.

Q: So from paragraph 15 of Exhibit 20, Mrs. Gifty Afenyi-Dadzie is confirmed as the authorized representative of the seller, is that correct?

A: That is correct.

Q: If you go to the signature page, she witnessed the agreement, is that correct?

A: There are two director signatures there. The first one represents First African Savings and Loans (FASL) and I believe that will be Mrs. Gifty Afenyi-Dadzie’s signature.

Q: If you look at the first page of Exhibit 20, it has a cover letter written by the accused person?

A: That is correct.

Q: And this cover letter was received by the Hon. Gifty Afenyi-Dadzie and signed by her as received, is that correct?

A: That is correct.

Q: Go to paragraph 11 (v), from the last but one sentence, it reads that the seller warrants to the buyer that the seller has obtained the requisite authorization from Bank of Ghana (BOG) to sell the shares to the buyer, is that correct?

A: That is correct in the document.

Q: If you read paragraph 4 of that same agreement, you will realize that from the cut-off date, the seller was supposed to cease having responsibilities of the day-to-day affairs of First African Savings and Loans (FASL), is that correct?

A: If I may read the cut-off point. (The witness reads paragraph 4 of Exhibit 20). That is correct.

Q: It also goes on to say that the sellers’ representatives on the Board should all resign, is that correct?

A: That is correct.

Q: Take a look at the statements of Gifty Afenyi-Dadzie to the Commercial Crime Unit (CCU) and the Special Investigation Team (SIT) dated 27th August, 2018, 25th September, 2018 and 18th December, 2018, do you recognize them as the statements given to you?

A: Yes my lady. I can recognize them.

Mr. Sory: My lady I want to tender the statements through the witness.

By Court: Any objection?

Mrs. Keelson: My lady we have no objection.

BY COURT

The statements are admitted without objection and same are marked as follows:

a. The statement dated 27th August, 2018 as Exhibit 30
b. The statement dated 25th September, 2018 as Exhibit 31.
c. The statement dated 18th December, 2018 as Exhibit 32.

Q: Can you take a look at each of the statements. None of those statements directly refers to the Share and Purchase Agreement (SPA), is that correct?

A: That is correct. None mentions the Share and Purchase Agreement (SPA) but it mentioned the expression for equity shares.

Q: I am putting it to you that Mrs. Gifty Afenyi-Dadzie deliberately suppressed information about Exhibit 20 because she knew its disclosure would have clarified the reason for the existence of the second FASL account.

A: As part of our investigations, we handed over statement forms to her in her office when she was not under any form of pressure. We asked her to indicate clearly everything about the FASL account which was under investigations. Honestly, I cannot tell if she deliberately decided to hide any form of information whatsoever.

Q: I am further putting it to you that Mrs. Gifty Afenyi-Dadzie always knew that Exhibit 20 provided for cut-off date by which time the Beige Group officials should have taken full control over FASL.

A: She never mentioned that to me on the occasions that I met her as part of my investigations.

Q: I am also putting it to you that Mrs. Gifty Afenyi-Dadzie always knew that FASL had officials of the Beige Group working within the institution.

A: That is correct. She mentioned that to us.

Q: I am therefore putting it to you that she always knew that those Beige Group officials who worked with FASL had access to the letterheads of FASL and did not have to forge them?

A: She did not mention that.

Q: Take a look at Exhibit 21, it is written by Mrs. Gifty Afenyi-Dadzie on behalf of FASL to the Beige Group, is that correct?

A: That is correct.

Q: And in the second paragraph of that letter, Mrs. Gifty Afenyi-Dadzie is drawing the attention of the Beige Group to further capitalize FASL, is that correct?

A: That is correct my lady.

Q: And she is requesting that the Beige Group provide the additional capitalization required, is that correct?

A: That is correct.

Q: She mentions then in the letter that the Beige Group should make further capitalization requirements whiles waiting BOG’s approval, is that correct?

A: That is correct.

Q: Take a look at Exhibit 23, if you look at the first sentence you realize that it is the Beige Group’s answer to Mrs. Gifty Afenyi-Dadzie letter (i.e., Exhibit 21), is that correct?

A: That is correct.

Q: If you look at the fourth paragraph of Exhibit 23, the Beige Group clearly informs Mrs. Gifty Afenyi-Dadzie that, once there was no clarity on the BOG’s approval, they were not inclined to fulfilling that capitalization requirement, is that correct?

A: That is correct.

Q: Take a look at Exhibit 24, if you look at it, it is Mrs. Gifty Afenyi-Dadzie second letter to the Beige Group requesting the same capitalization after she receives Exhibit 23, is that correct?

A: The letter that is Exhibit 24 was making reference to the initial letter that Mrs. Gifty Afenyi-Dadzie earlier sent on 30th March, 2018. She did not capture the response from Beige.

Q: Take a look at Exhibit 25, from the first sentence you will realize that it is the Beige Group’s direct response to Mrs. Gifty Afenyi-Dadzie’s letter (i.e., Exhibit 24) is that correct?

A: That is correct.

Q: If you read the second and third paragraphs of Exhibit 25, the Beige Group repeats that until there was clarity on the approvals from the BOG, they were not going to make further investments in FASL, is that correct?

A: That is correct.

Q: I am putting it to you that the Beige Group took the decision not to invest in FASL because contrary to the representations made in Exhibit 20, the Beige Group now realized that no approvals were sought by the seller as represented by Mrs. Gifty Afenyi-Dadzie and the other authorized representatives.

A: Linking Exhibits 20, 23 and 25, that is correct.

Q: I am further putting it to you that linking Exhibits 20, 23 and 25, Mrs. Gifty Afenyi-Dadzie was definitely not truthful to you and your investigation team when she represented herself and Kwabena Bonsu as representing the management team of FASL to the exclusion of the Beige Group officials

A: We asked her to volunteer statements out of her own volition which she did.

By Court: Answer the question. Kindly repeat the question for him to answer.

Q: I am further putting it to you that linking Exhibits 20, 23, 24 and 25, Mrs. Gifty Afenyi-Dadzie was definitely not truthful to you and your investigation team when she represented herself and Kwabena Bonsu as representing the management team of FASL to the exclusion of the Beige Group officials.

A: When she appeared before us, whatever she said, we assumed was the truth.

Q: Take a look at paragraph 13 of your witness statement, in that paragraph of your witness statement, you say that a total amount of 320 Million was transferred from the accounts of customers of the Beige Bank to BCAM, do you still stand by that statement?

A: Yes my lady.

Q: From your investigations, did you find out that the bank was formerly a Savings and Loans business?

A: That is so my lady.

Q: And did your investigations reveal that the conditions of operating a Savings and Loans business are different from that of a universal bank which the bank transitioned into?

A: Our investigations was not centered on issues relating to the type the entity operating as Savings and Loans. It was solely at the time it was a bank.

Q: I am putting it to you that the conditions for operating Savings and Loans business and that of a universal bank are different.

A: That may correct because the licenses are different.

Q: I am also putting it to you that one of the differences is that savings and loans businesses give fixed term deposit customers a higher interest rate than that of universal banks.

A: That I cannot tell because I have never dealt with Savings and Loans entities.

Q: I am further putting it to you that at the time the bank operated as a savings and loans entity, it had fixed term deposit customers.

A: That I cannot tell.

Q: And I am putting it to you that the said fixed term deposit customers of the bank when it was a savings and loans company remained customers of the bank on the same terms when the bank transitioned into a universal bank.

A: That I cannot tell. As I stated earlier, we did not delve into matters relating to the entity when it was Savings and Loans.

Q: On the last adjourned date, you confirmed to the court that you had had some assignments that required you to interact with the bank specifically Ecobank, you maintain that?

A: That is correct.

Q: And you also have some training in financial analysis and reporting, is that correct?

A: That is correct.

Q: Apart from that, I am sure you are also a customer of a bank or two, is that correct?

A: I am a customer of a bank.

Q: As a customer of a bank, when you deposit money with the bank and you back to withdraw that money or part of it, the bank does not give the exact money you deposited with the bank in the notes you deposited, is that correct?

A: That is correct but the probability that you get the notes you deposited with the bank is also correct.

Q: I am putting it to you that the bank does not owe an obligation to give you the exact notes you deposited.

A: That is correct.

Q: I am further putting it to you that the bank uses the money as part of its pool of funds subject only to the obligation of paying you the value of what you put in the bank.

A: That is correct my lady.

Q: You also know that when customers deposit money with the bank especially on fixed term arrangement, they expect interests on their monies, is that correct?

A: That is correct.

Q: I am putting it to you that to be able to pay the interest that the customer expects, the bank must trade with the money.

A: That is correct.

Q: In your investigations regarding funds which were deposited into BCAM’s account from the bank, your concentration was on fixed term deposits, is that correct?

A: That is correct.

Q: Indeed, fixed term deposits of customers of the bank whose accounts reflected in that of BCAM was also the subject of the investigations of Ernst and Young, as you testified in paragraph 27 of your witness statement, is that correct?

A: That is correct.

Q: Take a look at Exhibit 27 which is the statement of Susana Philips, from line 10 onwards that the purpose of the second FASL account was for BCAM placements, is that correct?

A: That is correct.

Q: She actually says that she confirms this fact from the Managing Director, Thomas Esso who was at the time the Managing Director for BCAM.

A: That is correct.

Q: This statement is a statement of a lady called Nana Afia Evelyn Kyei dated 20th January, 2019 to the SIT, is that correct?

A: That is correct.

Mr. Sory: My lady I want to tender the document through the witness.

By Court: Any objection?

Mrs. Keelson: My lady we have no objection.

BY COURT

The document is admitted without objection as Exhibit 33.

Q: Take a look at the second page of Exhibit 33 from paragraph 6 to about 10, Nana Afia says in that statement when the bank migrated from a Savings and Loans business to a universal bank, its customers still wanted the same interest rate that they enjoyed when it was a savings and loans company, is that correct?

A: That is correct.

Q: So from about line 11 to line 15 of Exhibit 33, she says that to solve the problem, management of the bank came up with a flow chart to determine the interest rates the bank could sustain, is that correct?

A: That is correct. It is even captured in our administrative report, (i.e., Exhibit 29).

Q: She further says that management decided that where the interest rate exceeds that which the bank could sustain, the customers’ investments should be transferred to BCAM, is that correct?

A: That is correct.

Q: Take a look at Exhibit 18, it is a letter written by the Bank to the Bank of Ghana, is that correct?

A: That is correct.

Q: In the last sentence of the first page of that letter, the bank informs the Bank of Ghana (BOG) that its deposit book mix is heavily skewed towards fixed term deposits, is that correct?

A: That is correct.

Q: If you go to the second page under the heading “Deposit Book Pricing” from the last word on the third line, the sentence reads that “the Beige Bank risks facing liquidity challenges if the deposit rates remain the same”, is that correct?

A: That is not the case. If I may read the portion. (The witness reads to the hearing of the court).

Q: Take a look at Exhibit 33 which is the statement of Nana Afia, take a look at line 18 onwards, the line which starts from “I did not move … up to line 20, Nana Afia says that customers were moved with their knowledge, is that correct?

A: That is correct per Nana Afia’s assertion.

Q: You have just been handed two statements written by Thomas Kwasi Esso. one dated 22nd February, 2019 and the other dated 12th September, 2018. They were written to the Commercial Crime Unit (CCU) and the Special Investigation Team (SIT) respectively, is that correct?

A: That is correct.

Mr. Sory: My lady we want to tender the documents through the witness.

By Court: Any objection?

Mrs. Keelson: My lady we have no objection.

BY COURT

The statements are admitted without objection and same are marked as follows:

a. The statement dated 22nd February, 2019 is Exhibit 34.
b. The statement dated 12th September, 2018 is Exhibit 35.

Q: From the statement Thomas Esso was the Managing Director of BCAM, is that correct?

A: That is correct.

Q: He confirmed in the two statements (i.e., Exhibits 34 and 35) that BCAM had been doing business with FASL even before he joined BCAM, is that correct?

A: That is correct and it is captured in our administrative record.

Q: The document just shown to you is the witness statement of Thomas Esso who gave you his statement marked Exhibit 34 and 35, is that correct?

A: That is correct.

Mr. Sory: My lady we want to tender the witness statement of Thomas Esso on 9th December, 2022 through the witness.

By Court: Any objection?

Mrs. Keelson: My lady we do not actually have an objection just to say that he is not the proper person for the statement to be tendered through.

By Court: Looking at the Practice Direction, it can be admitted as hearsay evidence since you did not call that witness. He is the right person that the statement can be tendered through. It is also admissible.

BY COURT

The witness statement of Thomas Esso filed on 9th December, 2022 is admitted as Exhibit 36 and the attached report is marked as Exhibit 36A.

Q: If you look at that statement, attached to it is a report that Thomas Esso himself wrote to the Board of Directors of BCAM, is that correct?

A: That is correct.

Q: Take a look at page 6 of that report, there is a heading there titled “Transfer of TBB”, that is to say that Bank’s FTD meaning Fixed Term Deposit clients to CBG, have you found that in the report.

A: Yes my lady.

Q: Thomas Esso writes under that heading that, there were three categories of clients who were the subject of the meeting between BCAM itself, KPMG which was the Receiver, Consolidated Bank Ghana Limited (CBG) and officials of the Bank of Ghana, is that correct?

A: That is correct.

Q: These three categories of clients are BCAM’s own clients, the Bank’s clients who were unaware that their deposits were moved to BCAM and finally the Bank’s clients who knew their deposits were moved to BCAM but were denying it.

A: That is correct as captured in the report.

Q: Take a look at Count 10 of the charge sheet, it says that the sum of GH¢50,000 was entrusted to the accused person to hold on behalf of the bank, is that correct?

A: That is correct.

Q: In your investigations, did you confirm who handed over this GH¢50,000 to the accused person on behalf of the Bank?

A: No my lady. I am not aware of that.

Q: Did your investigations also reveal h ow the accused person caused the GH¢50,000 to paid to himself as stated in Count 10 of the charge sheet?

A: No my lady. Whatever I did as far as the investigation is concerned is captured in the admirative record

Q: In count 11, it is also stated in the particulars of offence that the sum of GH¢500,000 was entrusted to the accused person, is that correct?

A: That is correct.

Q: Did your investigations confirm who handed over the GH¢500,000 to the accused person?

A: As captured in the particulars of offence, Sadat Car Accessories came up in our investigations. We tried reaching out to them but we did not get them because the amount captured was associated to them.

Q: But your investigations did not reveal whose money the GH¢500,00 was, is that correct?

A: Our investigations was based on depositors’ funds and I could not tell whose money that GH¢500,000 actually was.

Q: I am putting it to you that the GH¢500,000 was the Bank’s funds because depositors do not have monies separate from the funds available to the Bank from all of its other sources of funds.

A: That is what is captured in the particulars of offence.

Q: If you look at Counts 11 to 34 of the charge sheet you will realize that all of those counts allege that various sums of money was entrusted to the accused person on behalf of the Bank, did your investigations ever reveal which customer’s funds were entrusted to the accused person?

A: Our investigations was talking about customers funds that went to BCAM’S account which in turn went to FASL but we cannot tell the specific customers though the list is there.

Q: From your own testimony in this court and that of the individuals who gave statements to the police, the funds which moved from the Bank to BCAM were placements made by the Bank with BCAM in the normal course of its business.

A: That is correct. No customer went directly to BCAM.

Q: Did your investigations reveal that BCAM was a Fund Management Company licensed to take placements from the Bank and anybody?

A: Yes, that was initiated by the Commercial Crime Unit (CCU) of the Ghana Police Service.

Q: I am putting it to you that when BCAM receives placements from anybody including the Bank, BCAM manages the funds as its funds subject to the obligation to pay back the money to whoever placed the money with them.

A: That is so. However, if I may add. In our conversations with the Regulator on the license of BCAM, he stated that BCAM did not qualify to do that.

Q: Do you know who BCAM’s Regulator is?

A: We spoke to Securities and Exchange Commission (SEC).

Q: Did you confirm from SEC whether SEC had given BCAM a licence or not?

A: Those aspects had been initiated by the Commercial Crime Unit.

By Court: Answer the question. Repeat the question for him to answer.

Q: Did you confirm from SEC whether SEC had given BCAM a licence or not?

A: SEC did not give us the feedback.

Q: Did your investigations reveal if SEC sanctioned BCAM for operating as a Fund Manager when it was not authorized to do that business?

A: SEC did not sanction BCAM.

Q: If you take a look at Exhibit 36A which was just tendered through you, you will see clearly that Thomas Esso informed BOG that BCAM was receiving placements but the Bank of Ghana (BOG) did not question BCAM’s authority to operate as such?

A: That is correct

Q: In fact, page 6 of Exhibit 36A will confirm that there were even discussions regarding whether BCAM should retain its own clients who placed investments with BCAM, is that correct?

A: That is correct.

Q: I am putting it to you that at all times material to your investigations, BCAM always had license from SEC to conduct its business ad Fund Manager.

A: The license did not come to my notice so I cannot tell.

Q: Did you ever demand a copy of the license from Thomas Esso when you took the statement from him?

A: No my lady.

Q: I am putting it to you that you did not properly conduct your investigation well otherwise you would have been given a copy of that license from SEC to BCAM to operate as a Fund Manager.

A: We properly conducted our investigations.

Q: If you are shown a copy of that license, will you be convinced as to whether or not BCAM was operating as a duly licensed Fund Manager?

Mrs. Keelson: My lady I have an objection. The witness has told the court that he did not see a copy of the license. Now you are asking him a question whether if you show him a copy, he would be convinced. He has told the court that he has not seen a copy.

Mr. Sory: My lady I do not see it as an objection. I see it as a complaint. My lady when a witness is testifying and I ask him a question which you consider inadmissible, you should trace it to a source or a Rule that bars what the line questioning is. As we speak, no Rule has been referred to you as to why they find it objectionable. It is just that you are not comfortable and you have not shown me what practice book tells you what to do that I am not doing so that is why it is a complaint.

Secondly, I asked him a specific question. I have not even yet shown it to him as for him to decide whether it is authentic or not. I am saying in cross examination, there are a number of things to elicit from a witness. It is not just what he knows. I can also introduce evidence through him to show that a position he has taken is inconsistent and address it as a point of credibility or otherwise. He is the investigator and he has taken a particular position on it because he did not see the specific document. If he now sees it, he can change his mind.

BY COURT

Whether or not the witness is convinced about anything is irrelevant. The witness is here to attest to what he knows and the cross examination has the aim of testifying credibility or putting one’s case across. Convincing a witness for the opposing side is not one of them. The question is relevant and disallowed.

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