Beige Bank case: I can't tell if GH¢3 million from Ideal Finance fund was siphoned – Witness

The Chief Prosecution Witness in the ongoing case in which the founder of the defunct Beige Bank is standing trial has told the High Court that he cannot tell if an amount of GH¢3 million from Ideal Finance account to BCAM account was siphoned.

Julius Ayivor, a Chartered Accountant with the KPMG and a lead member of the Receiver of the bank who had given evidence for the state also said, customers of banks are not bothered what their deposits were being used for as long as they found monies in their accounts.

Mr Ayivor who is facing questions from lawyers of Michael Nyinaku who has pleaded not guilty to an alleged GH¢2.1 billion siphoning to test the veracity of his evidence also said there are accurate records of transactions between Ideal Finance and BCAM about the said funds he said was siphoned

Lead Counsel for the accused, Thaddeus Sory while scrutinizing the witness said, by looking at Exhibit H3 which is the (statement of account of Ideal Finance) alone, “you cannot say any money was siphoned between the Beige Bank and BCAM which is licensed to receive funds.

The witness in his response agreed with counsel saying “you cannot say so by a reference to just looking at Exhibit H3 (statement of account for Ideal Finance).”

He however explained that, “you can always find out from the bank’s own records where the money went to especially if the money went into an account that is also domiciled with Beige Bank.”

He added that, with the GH¢3 million in question, “the reference number is the unique identifier that can help you trace where the money went to.”

“My lady, in a bank (every transaction has two legs), you can never have a transaction that is only one leg, when money moved from one location, it goes to another location, and banking softwares always keep records or traces of those movements.”

It was the case of counsel that, when the witness “look at Exhibit H2 (Statement of account of BCAM), it is that which reflects the records and the testimony of the BCAM’s obligations to the bank and that Ideal Finance does not reflect there.

“My lady, not BCAM’s obligation to the bank, but rather the bank’s obligation to BCAM,” the witness answered when asked by counsel.

The witness also agreed with counsel that ideal finance had no role to play in that transaction.

Counsel said that Ideal Finance is entitled to use money deposited with the bank when it goes to the bank to collect it.

Lawyer Sory also added that at any point in time, when Ideal Finance walks to the bank for a statement of their account, that money should reflect on the bank on that account.

At this point, counsel said, “it is clear from Exhibit H3, that if Ideal Finance applies for its account statement at any point in time, it would reflect FTD which you explained to the court earlier to mean (Fixed term deposit) for 182 days.”

But the witness disagreed saying, “you’ll note from Exhibit H3 that the transaction immediately preceding that GH¢3 million is a transaction with reference number MM1809430543 in an amount of GH¢2,378958.90.

He said “the outstanding balance on the account on that day is GH¢5383715.08, which means that if Ideal Finance had walked to the bank on that day, the amount that will be available to Ideal Finance would be the GH¢5.3 million however the GH¢3 million was siphoned out of the account that same day which reflects as a debit on the account.

He said “the closing balance went down from GH¢5.3 million to GH¢2.383715.08.

“My lady so at that moment, eventhough you can see on the statement that there is a GH¢3 million transaction, it doesn’t mean that GH¢3 million still remains in the account of Ideal Finance and it can never be so my lady. Because it moved into the account of BCAM and it is BCAM that controls their account with the bank, they can move money from their account or decided to leave the money in that account,” the witness noted.

At this point, counsel said he was not disagreeing with the witness but “all I am putting to you is that the figures you just read to the court are from the record of Ideal Finance with the bank,” which the witness agreed.

The witness also admitted that if Ideal Finance takes a look at this statement; they’ll know that GH¢3 million of its money is no longer available to it.

Transactions

The witness while identifying the transactions for which the account of Ideal Finance was debited and credited to BCAM account, said “ Ideal Finance’s account was debited on April 16, 2018 with an amount of GH¢3 million and the reference number for that trasanction was the same amount was siphoned into BCAM account on the same date with the same reference number.

Asked to tell the court if the description of that transaction was a fixed term deposit for 182 days as per the statement of account of Ideal Finance, the Witness agreed.

Asked if it was the same description on exhibit H2 which BCAM statement of account, the witness agreed.

The witness also confirmed that the reference numbers are the same between BCAM Statement of Account (Exhibit H2) and Ideal Finance Statement of Account (Exhibit H3).

At this point, counsel put it to him that his usage of the word siphon cannot be correct and pointed to the contradictions of the witness’ definition of siphoning funds.

But, the witness disagreed saying “My lady the use of the word siphon is very correct.”

Counsel said the bank lodged the same money up in a pidgin hole so in case Ideal Finance is coming for its money the bank will open into the pidgin hole to satisfy Ideal Finance’s demands.

But the witness said that is not what his answer meant, and he then offered an explanation.

“When a customer deposits money into his or her account the bank keeps the record of that deposit and that record reflects on the customer’s s statement of account such that when the customer walks to the bank and requests for a statement of account when that statement of account is printed out of the bank’s system, that money the customer deposited into that account must show both on the date when it was deposited and also in the residual balance that will show in the statement.”

Additionally, he said, “when a customer checks for instance on the banks online platform on the bank app the customer should see that he has that amount sitting in his account.”

“My lady as I explained earlier, money is tangible so you cannot separate customer A’s money which he brought to a bank from a customer B’s money because they all go into a pull. However the customer’s statements that is testament to the banks obligation to the customer must always reflect the amount the customer brought to the bank. That amount can only go down if the customer instructed a portion or all of that amount to be transferred into another account.”

Customers understanding of banking

Asked by counsel if customers understanding with banking including the fact that regardless of where the bank put its money whether it is joined in a pull of funds or it is used by the bank in the course of its business all the customer is entitled to is the money he gave or deposited with the bank, the Witness agreed.

Counsel also said if the Witness looked at the Ideal Finance records in exhibit H3 which reflects its transaction with the bank recording the debit in the sum of GH¢3m on April 16, 2018 it is described clearly as a fixed term deposit between Ideal Finance.

But the witness disagreed saying, “The description there does not say that the GH¢3m that was siphoned out of the account was a fixed term deposit arrangement between ideal finance and that bank.

He added that it’s not possible that it could be the case because that GH¢3million moved out of Ideal Finance account into the account of another party.

He explained that if the GH¢3m was a fixed term deposit with the bank, the bank’s records on Ideal Finance would have shown that indeed Ideal Finance invested a sum of GH¢3m with the bank.

Asked if Exhibit H3 which is the statement of account for Ideal Finance record any transaction between Ideal Finance and any bank, the Witness agreed.

He said the records of Exhibit H3 reflects the relationship between ideal finance and the bank regarding the GH¢3 million transaction.

Banks record

Counsel said on July 26, 2018, a sum of GH¢8,465, 597.23 was credited to Ideal Finance, which the Witness agreed.

The Witness also admitted that the description that accompanies it is FTD which he had explained mean fixed term deposit, a redemption of Ideal Finance.

The witness also said on the same day on July 26, 2018, the sum of GH¢8,341, 221.05 was debited to the account of Ideal Finance and that last transaction was labeled as a new deposit.

Counsel said on August 3, 2018, there is a repayment of the principal GH¢3568,438.36.

The witness in his response agreed and said that GH¢3.5 million relates a repayment to an earlier fixed deposit that Ideal Finance deposit at the bank on March 1, 2018.

He said the bank was repaying Ideal Finance fixed term deposit and this amount was different from the GH¢3 million siphoned out of the account of April 16. 2018

He said with regard to the GH¢8m after the GH¢3.5m, there are two new deposits on August 6, 2018 in the sums of over GH¢3m and over GH¢8m.

He also said on the same day august 6, 2018, ideal finance had a credit balance in excess of GH¢12m.

The Financial and Economic Court of the Accra High Court presided over by Justice Afia Serwah Asare-Botwe, a Justice of the Court of Appeal sitting as an additional High Court judge has adjourned the case to March 10, 2023 for continuation.