I was going to write a long piece/sort of break my silence on some of the issues raised by some commentators regarding the banking sector clean-up, especially in respect of a “bailout” versus “resolution” strategy.
(Forget the political innuendos: I personally think it is not worth responding to except probably if only to show how nonsensical it is/sounds.
No one has time for political lightweights: with all Ndoum’s & Dufour’s financial muscle, if the speculations were true that they’re being defanged somehow for political reasons, they’ll either have long being Presidents or political kingmakers in this town. We should stop giving people “powers” they don’t have.
For the records, this is just ONE of the issues raised by the audit report on Unibank:
1. In November 2013 UniBank bought Meridian House for US$5.14 Million
2. A month later (in December), it claims to have sold it to StarLife Assurance, another Duffour-related firm for US$6.3 Million (strangely through a third party called Kwabena Basoah)
3. StarLife says it paid US$1 Million to UniBank + two parcels of land it says totals US$5.3 Million. There is no valuation documents confirming the value of the land. Indeed, no title deeds on the lands can be found. And, the US$1 Million from StarLife was neither paid to UniBank nor the third party, Kwabena Basoah. Instead, it was paid to a certain Dakmak Adel Mustafa
4. The deed assigning Meridian House to StarLife dated 24 December 2013 was signed by Dr Kwabena Duffour II, CEO of UniBank
5. UniBank’s Finance Department claims it has no knowledge of this sale and payment arrangements and still has Meridian House in the Bank’s fixed assets register
6. In effect UniBank bought a property in November for about US$5 Million, sold it to a ‘Group’ member, StarLife in December ‘for profit’ at US$6.3 Million, receiving US$1 Million (approximately the size of the ‘profit’) which was not even paid to it but paid to a certain Dakmak, and for two landed properties whose values cannot be ascertained and titles cannot be inspected. And all of this was done when the Bank’s Finance Department was not aware, still have the property on its books, but it’s CEO purports to have signed a Deed assigning same.)”
However, THIS I will say: those, including some of the affected “owners” of the resolved entities, have little appreciation of the US’ financial crisis, the underlying causes, and the reasons informing the decisions taken (mainly) by the Federal Reserve & Treasury Department and their attempts to draw comparisons between the two should not be taken seriously.
I will suggest that you require a different strategy when the issues surrounding the sector are underpinned by attempting to resolve the contagion caused by the potential unravelling of bilateral and multilateral exposures between financial behemoths (as a result of positions taken on derivatives etc) AND another strategy when the contagion is largely caused by bad governance; unresolved, almost calcified hardcore illiquidity after several extension of liquidity to entities by the regulator, forbearance by the regulator, misconduct and self-dealing by entities, and in some cases asset switching bordering on near-criminality.
Others may be, but I, personally, am unapologetic about the Central Bank’s handling of the clean-up of the sector and they have my support 100%. And more.
One of the things we are not short of in this country is hypocrisy, and you will find it on display every day, especially by the likes of John Dramani Mahama when he deigns to offer lessons on how to clean up the mess he superintended.
OK, I said it will be a short piece so let me end here.