DKM Diamond Microfinance Company Limited
invested GHS77 million of investors’ deposits
into personal businesses and subsidiaries
belonging to the firm’s managers, Finance
Minister Seth Terkper has told Parliament on
Tuesday February 23, 2016.
The action by the managers of the firm
breached the Bank of Ghana’s regulations
concerning the operations of microfinance
companies, a situation that forced the Central
Bank to close down the firm.
DKM, according to ClassFMonline.com’s
investigations, had GHS10.7 million in its vault
as of the time the Central Bank closed it down.
Subsequently, the Central Bank gave DKM a
month to raise GHS50 million in addition to
the GHS10.7 million the firm had in its vault,
so it could be cleared to resume operations
and pay its investors their due principals and
DKM, however, was unable to do so, despite an
extension of the grace period accorded it by
the Central Bank.
The inability of DKM to raise the additional
funds was the main hurdle, which prevented it
from getting clearance from the Bank of
Ghana to reimburse its depositors, thus leading
to a lock-up of several millions of Ghana cedis
of investors’ money.
The CEO of DKM was arrested by the BNI, at a
point in time, over the matter but was later
granted bail. He was sued by one client and
put on remand for a while, but, again granted
bail. Hundreds of clients affected by the
microfinance debacle in the Brong Ahafo
Region, have held several demonstrations and
since the middle of last year when the scandal
broke, in an attempt to retrieve their
Speaking at a press conference in Accra on
Friday January 8, Deputy Governor of the Bank
of Ghana, Mr Milicen Narh said: “DKM
Diamond Microfinance Company ltd had been
misreporting to the Bank of Ghana and had not
been keeping accurate and reliable records of
all transactions in its books, thereby violating
section 53 and section 71 of Acts 673 as
amended. DKM Diamond Microfinance
Company ltd was overexposed to its affiliates
in violation of sections 41 (1) and (2) of Act
673 as amended.”
Apart from DKM, several other microfinance
firms in the Brong Ahafo Region are caught in
the same debacle. Minority MPs, who hail
from the region recently held a press
conference and urged the President to
intervene in the matter.
The Bank of Ghana also closed down 70
microfinance firms recently.
Source : Classfmonline.com