The writing was on the wall for the collapsed Capital Bank as far back as at least 2014, according to memo sighted and published by the Insight Newspaper in January 2015, which went under the radar at the time.
The Insight Newspaper obtained information indicating that the Capital Bank, then First Capital Plus Bank, was on the verge of collapse with the bank’s Chief Executive Officer describing the situation as a “time bomb.”
Following the collapse of UT Bank and Capital Bank, and their takeover by GCB Bank, because of the inability of the two banks to turn around their negative capital adequacy position, this memo has resurfaced adding more context to Capital Bank’s collapse.
The August 2014 memorandum, signed by the CEO of the Bank at the time, John Kofi Mensah, warned that Capital Bank had capitalization issues and may not be able to meet its obligations to its clients.
“I regret to mention that unless we act ourselves and so with all the promptitude that it deserves, things may go out of hand, including the possibility that the Bank of Ghana may step in, by which time it will be too late for us to make excuses, with all of us risking sanctions,” the memo stated.
Mr. Mensah also stated that he would regard any non-action on his warnings a vote of no confidence in his vision for the company.
“…the Board’s acceptance or otherwise of my proposals would go a long way to assist my interpretation of the Board’s willingness to share in my vision for the Bank and its customers at large. I will certainly interpret that as a vote of no confidence in my ability to steer the bank to its destination with your respective backing and cooperation.”
The memorandum addressed to the Board of the Bank also outlined cases of mismanagement that had compromised their shareholder’s credibility.
Former Capital Bank CEO predicted bank's collapse
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