Government not responsible for GN Savings’ collapse – Gideon Boako

Gideon Boako, a spokesperson for the Vice President, has rejected claims that government’s indebtedness to GN Savings and Loans Company caused its collapse.

The Chairman of Groupe Nduom, Dr. Paa Kwesi Nduom had alleged that government’s failure to pay contractors who owed him caused his company’s demise.

Former President John Dramani and some residents of Elmina in the Central Region had also made similar claims.

However, Mr. Boako on Eyewitness News rubbished these claims, describing them as deceptive.

“There is a whole bunch of deception that is going on. Remember that in December 2018 when the last batch of the banks were going down into Consolidated Bank and all, GN Bank was downgraded into Savings and Loans. At that point, GN Bank applied for a downgrade into Savings and Loans.”

“They got into Savings and Loans and the books were still not looking good to the extent that investors were not willing to even partner [the company]. I have heard the claim by GN Savings and Loans and that is absolutely false…that government owes contractors who are in debted to GN Savings and therefore if government pays these contractors, it will have enough cash access and therefore will not run into insolvency. That is palpably false.”

He explained that GN Savings and Loans made a mistake by advancing customers’ deposits to Gold Coast Security, a subsidiary company that breached the regulatory requirements by advancing these loans to contractors.

Mr Boako said this move eventually led to the collapse of the bank.

”What happened in real terms is that GN Savings and Loans after collecting deposits from customers advanced part or most of those deposits that have been accumulated to its subsidiary company including Gold Coast Security. Gold Coast Security is a company that is licensed by the Securities and Exchange Commission.

Gold Coast Security by its mandate is not allowed to advance loans yet it went ahead, breaching the regulatory requirement to advance loans to contractors who then had contracts with government…And so that argument that they had given loans to contractors and if the contractors were paid they would not have gone insolvent is just a matter of deceiving the public.”