The Accra High Court has cleared the Managing Director of Reroy Cables Limited, Mrs Kate Quartey-Papafio, of any wrongdoing in the collapse of the Capital Bank.
The court acquitted and discharged the businesswoman who was on trial with three others on allegations of conniving and stealing GH¢620 million liquidity support given to the defunct Capital Bank by the Bank of Ghana (BoG).
Mrs Quartey-Papafio became a free person yesterday after the court, presided over by Justice Eric Kyei Baffour, a Justice of the Court of Appeal sitting as a High Court judge, upheld a submission of ‘no case’ by her lawyers.
However, the court dismissed the respective submissions of ‘no case’ by the remaining three accused persons — William Ato Essien, the Founder of the defunct bank; Fitzgerald Odonkor, the Managing Director of the bank, and Tettey Nettey, the Managing Director of MC Management Services, a company said to be owned by Essien.
Consequently, Justice Kyei Baffour directed Essien, Odonkor and Nettey to open their defence at the next hearing slated for July 22, this year.
State prosecutors had accused Mrs Quartey-Papafio of conniving with Essien to steal GH¢70 million of the GH¢620 million liquidity support extended to Capital Bank by the BoG.
It was the case of the prosecution that Essien transferred the money into the account of the businesswoman to be used for the purchase of shares in Capital Bank.
Mrs Quartey-Papafio and Essien were together charged with conspiracy, and separately charged with stealing and money laundering.
In his ruling, Justice Kyei Baffour held that the prosecution failed to establish the ingredients of stealing, conspiracy and money laundering with regard to the GH¢70 million.
Firstly, the court held that Mrs Quartey-Papafio was approached to be a trustee for a certain investor on whose behalf the said shares were being bought.
Justice Kyei Baffour said the evidence on record showed that at all material times during the transaction, she believed and thought the money was from the said businessman, and had no clue that it was for Capital Bank.
The court held that the evidence on record also showed that Mrs Quartey-Papafio was unsuccessful in her attempt to withdraw the money from her account, but that unsuccessful attempt was not sufficient to establish a basis for stealing.
According to the court, the only mistake on the part of the businesswoman was not being diligent in the transaction, which could also not impugn criminality.
“A prima facie case should not be found against her because she acted childishly by failing to apply her presumed business acumen as a successful businesswoman who should have been wise and diligent.
“The law does not punish the fool but only the one who acts with evil intent,” Justice Kyei Baffour ruled.
Open your defence
With regard to Essien, Odonkor and Nettey, the court held that they were not successful with their respective submissions of ‘no case’ and must, therefore, open their defence.
This means the three accused persons will answer charges of stealing, conspiracy and money laundering
“The prosecution has succeeded in leading sufficient evidence enough for the court to invite 1st, 2nd and 3rd accused persons to answer to the respective counts for which they are facing counts one to twenty-three.
“The submission of ‘no case to answer’ filed on their behalf is found by the court not to hold water and is, accordingly, dismissed,” Justice Kyei Baffour held.
Revocation of licence
Capital Bank was one of the first banks that collapsed after a massive clean-up of financial institutions by the Bank of Ghana in 2017.
On August 14, 2017, its licence and that of UT Bank were revoked by the BoG, after the bank had declared them insolvent.
The BoG allowed the state-owned GCB Bank to acquire the two banks in order to protect depositors’ funds and also enable them to stay afloat.
The hurricane that swept through the banking sector due to the collapse of the two banks further heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity, known as the Consolidated Bank, Ghana.
Reason for the trial
The case was the first criminal trial in relation to the banking crisis that rocked the country in 2017 and 2018
It is the case of the prosecution that the accused persons engaged in various illegal acts that led to the dissipation of the GH¢620 million liquidity support given to Capital Bank by the BoG between June 2015 and November 2016.
According to the prosecution, Essien, with the aid of Odonkor, transferred the liquidity support to certain companies either controlled by him or in which he had interest.
It said GH¢130 million of the liquidity support was transferred to MC Management Services, which was later presented to the BoG as the initial capital to set up Sovereign Bank, another bank in which Essien had an interest.
The prosecution further alleged that between June and October 2015, Essien, aided by Odonkor, appropriated GH¢27.5 million of the liquidity support by carrying it in jute bags.
“The money was purportedly used as payment for a business promotion,” the prosecution added.