It was bizarre to turn policy matters into criminal indictment against Asiama – Bright Simons

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Presidency justifies nomination of Asiamah as BoG Governor

A Vice President of IMANI Africa, Bright Simons has said he struggled to understand the decision by the previous government to prosecute former Deputy Governor of the Bank of Ghana Dr Johnson Asiama who is currently nominated as Governor.

Bright Simons notes that the previous government turned policy issues into criticisms indictment against Dr Asiama, an action he described as bizarre.

Speaking on NewsFile on Joy FM last Saturday, February 15, he said ” The decision to prosecute or not is entirely legal because there are a lot of public policy considerations that go into it. This matter was extremely interesting because, in the banking and finance sector it is not only the legal issues that are important, there are other issues around macro-fiscal stability and others are important. The current BoG Governor was executing a policy that his colleagues in the Bank of Ghana agreed with, which was that we should the Emergency Liquidity programme, the fund that we had to support banks that are in liquidity challenges, we should use it to prevent banks from failing.

“There are two types of liquidity provisions in this respect, there is the Emergency Type that you use which can extend to as much as three months, and then you have the intraday, which is extremely critical. Intraday means that a bank is failing settlement, the central bank can step in to enable the overall processes in the banking system to continue flowing. What happens is, that when you pay someone money, you have an account with Bank A, and you are paying somebody in Bank C there has to be a settlement process because the accounts are not held at the same bank, you need to typically have a central bank situation where they debit the accounts with different banks.

“If at that moment the bank that is being debited doesn’t have money in their settlement account, it can lead to payments being failed and this can have serious distress element across the entire financial system. So if because of all these factors, a decision is made that we cannot allow contagion in the banking industry so we will give money to Unibank through UMB because at that time Unibank did not qualify to receive it directly, this was a matter approved by a matter of policy, how do you pick one of them, a deputy Governor and prosecute him? I think that was very difficult.

“On the UT matter where the former Attorney-General suggested that because of a single obligor 460million should not have been paid, I could not make the head and tail of it because a single obligor is in respect of the bank, you are prevented from giving too much of your money out to a single person because you are concentrating risk but the central bank is not obliged to observe single obligor if the central bank is giving liquidity assistance to a bank, what is the single obligor issue there? So I struggled to understand what he meant that it was in violation of the single obligor limit when the central bank was giving money to UT bank to the tune of 460 million Cedis.

“If UT bank was giving all that money out and you suggested that they were breaching single obligor limits I will understand but that will have nothing to do with the central bank. The argument that we have had so far is that the previous administration was lax when the asset quality review done in 2015 and 2016 did not pursue this further to hold some of the banks to account, all of us have had policy issues but remember that the law that is being used which gave the BoG all these powers that they exercised so liberally during the resolution, that law was passed in September 2016, long after these matters had occurred so the instruments were not available to the central bank to tackle this situation in the manner in which the one administration that followed them were able to do. So to turn all these policy matters into a criminal indictment was just bizarre.”

Bright Simons was reaching to the criticisms that former Attorbey0Geneal Godfred Yeboah Dame, levelled against his successor, Dr Dominic Ayine for discontinuing several high-profile criminal cases against officials of the ND C administration and others including Dr Asiama, describing this decision as alarming and detrimental to the interests of the republic.

Dame told journalists in Accra on Friday, February 14 that “The people of Ghana should be very scared if we have an AG whose primary consideration in the discontinuation of criminal cases involving the loss of billions of Ghana cedis is the position of defence lawyers on charges preferred against their clients rather than the interest of the republic in the prosecution of crime.

“Even more scary and bizarre is the claim of Dr Ayine that he did not consult President John Dramani Mahama before taking the monumental decisions to discontinue the criminal cases.”

Dame highlighted the gravity of the cases in question, noting that they involve the loss of significant amounts of taxpayers’ money and are related to the banking sector crisis, which has had a substantial impact on the Ghanaian economy.

“The cases involve the loss of colossal sums of taxpayers’ monies, and some relate to the banking sector crisis which affected the Ghanaian economy,” he added.