- 20 Marks
BCL – L1 – Q66 – Governance and ethical issues relating to business
Explain governance issues and director disqualification factors in a case involving fraud at a company.
Question
In 2015, KWEKU LTD, which carries on the business of exporting cassava and mangoes from Ghana to Europe, opened an account with Zenith Bank at the Tema Branch. In 2016, the Finance Manager, who is the sole accounts officer of the company, forged the signature of the Managing Director (who was also the sole signatory to the bank account of the company) and made several withdrawals from the company to the tune of GH₵550,000. The bank in that same year requested that the Managing Director should, within two weeks of the letter, confirm the credit balance on the account, which at the time stood at GH₵2,200,000. The Managing Director, without any further checks, signed the document, thus confirming the credit balance presented by the bank. In 2017, the auditors raised queries on some of the fictitious withdrawals. The Chairman of the Board ordered the Human Resource Manager to dismiss both the Managing Director and the Finance Manager with immediate effect.
Required:
(a) Explain FOUR (4) issues in the case relating to governance and duties of directors. (10 marks)
(b) Explain THREE (3) factors that disqualify a person from being appointed as a director. (10 marks)
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