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Update on Unibank criminal case: The Republic v Dr. Kwabena Duffuor and others

Update on Unibank criminal case: The Republic v Dr. Kwabena Duffuor and others

The accused persons in this matter have been charged with fraudulent breach of trust,
money laundering, dishonest appropriation, wilfully causing financial loss to the Republic
and conspiracy to commit crime.

The 1st Prosecution witness (Nii Amanor Dodoo), the Receiver of Unibank, has concluded his evidence-in-chief. Counsel for the 1st, 2nd , 3rd, 4thand 5 th accused persons have concluded their cross-examination of the Receiver.

At the time the license of Unibank was revoked, it was discovered that an amount of 5.7 billion cedis had been dishonestly appropriated by the shareholders with the connivance and assistance of some of the accused persons.

At the last court date, Counsel for Elsie Dansoa Kyere, (6th accused), the Executive Head
of Corporate Banking of Unibank at the time of the revocation of its license also concluded
his cross-examination of the Receiver., The Receiver informed the Court that fictitious
loans were originated by the 6th accused person and one Benjamin Ofori, a former
Executive Head of Credit Risk of Unibank (the 8 th accused).

This was done through memoranda that were channeled through Jeffrey Amon, a former senior Relationship Manager of Corporate Banking (7th accused) for approval from 4
th accused (Kwabena Duffour II) and 5th accused (Ekow Nyarko Dadzie-Dennis). The Receiver stated that these loans in question were neither channeled through the Management Credit Committee, Executive Committee nor the Assets and Liabilities Committee.

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These loans, according to the Receiver, were fictitious because they were made in the
names of persons who did not request that those accounts to be opened. He added that
ordinarily, when loans are approved, the proceeds go to the customer.

The proceeds of these fictitious loans were rather credited to the Deferred Expenditure Account. He added that the accounts of the customers listed in the memoranda were all fictitious since they were not the regular account numbers of those customers. The memoranda requested for credit facilities to be disbursed into these fictitious accounts.

The Receiver further informed the Court that this request by the 6th, 7th and 8th accused
persons, seeking the approval of the 4th accused (Kwabena Duffuor II) and 5th accused
(Ekow Nyarko Dadzie-Dennis) was wrong because the amounts involved could only have
been approved by the board of Unibank.

The Receiver explained that the management of the bank in the review of their monthly
management accounts were able to determine the actual profit or loss made. This was
then compared to the profit indicated in their prepared budget. On this basis, they then
determined how much loans should be generated to create interest. These loans were
backdated so the bank’s system would generate and post the interest generated into the
interest income account.

The Receiver informed the Court that the shareholders of Unibank siphoned funds from
the bank. This was charged against the Deferred Expenditure Account. Since this account
did not yield interest, they had to find a way of creating loan accounts that would generate
interest. According to the Receiver, these fictitious accounts were created to generate
interest income and to present a situation as though Unibank was operating profitably
and close to the budget they had set. The Receiver added that the fictitious loans were
also created to conceal money siphoned from the bank by shareholders. He added that
the 6th accused played a significant role in this through the initiation of memoranda
together with 7th and 8th accused persons. They did this with the approval of the 4
th and 5th accused persons. By this, they significantly misstated the financial statements of
Unibank.

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The Receiver explained there were meetings during which the plan to create the fictitious
loans and generate fictitious interest income was hatched. At these meetings, the
customers in whose names the fictitious loans were to be created were identified and the
interest rates to be applied agreed on. He added that the tabulation of the financial gap
that needed to be filled was prepared and based on this, the quantum of loans that needed
to be created were determined and signed off on. This formed the basis on which entries
were subsequently passed. The Receiver informed the Court further that his team was
informed by officials of the Finance Department of Unibank that this whole plan was
arranged by the 4th, 5th, 6th , 7th and 8th accused persons. He explained that because of
the sensitive nature of these transactions, the originating documents were retrieved from
the Finance Department after the entries were passed. He added that an official of the
Finance Department who believed that the entries which were being passed would create
problems someday hid one of those documents which he shared with the Receiver’s
team.

The Court was informed that the financial statements of Unibank did not show the actual
position of the Deferred Expenditure Account. He added that his team was informed that
the balances on this account were intentionally excluded from the financial statements
and the returns submitted to the Bank of Ghana. The 4th,5th,6th,7th and 8th accused
persons concealed the balances on the Deferred Expenditure Account by creating the
fictitious loans. According to the Receiver, the deliberate attempts to conceal the
magnitude of those transactions and failure to report the balances on the financial
statements and actually transferring some of these funds to the fictitious accounts was
wrong.

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The Receiver informed the Court that the shareholders of Unibank accepted responsibility
for the funds siphoned from the bank. He indicated that the shareholders initially offered
to hand over assets purchased with those funds. They later proposed to set up a special
purpose vehicle to house those assets and to use the special purpose vehicle to secure
loans to reimburse the bank. The shareholders, according to the Receiver, offered to seek
loans directly to pay back the siphoned funds. All these proposals, the Court was
informed, were yet to materialize.

The case was adjourned to 18th and 19th April 2023.

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