The Securities and Exchange Commission (SEC) has released a press statement to give updates on the revocation of licences of 53 Fund Managers Companies (FMCs) last year.
According to the SEC, government is planning to roll out a bailout package for clients of the 53 defunct Fund Management Companies (FMCs).
However, the SEC revealed in the statement dated August 28, 2020 that clients of Blackshield Capital Management Limited (owned by politician and businessman, Dr Papa Kwesi Nduom), Firstbanc Financial Services Limited, Apex Capital Partners and Ideal Capital Partners Limited will not benefit from the package.
The SEC explains that owners of these FMCs have filed applications in court to challenge the revocation of their licences.
“Four of the 50 FMCs whose licences were revoked have filed applications in Court to challenge the SEC’s decision to revoke their licences. These cases are at various stages in Court, and have resulted in a situation where no other action can be taken by the SEC or the Registrar General to proceed with official liquidation and government bailout of the clients of these four FMCs until the Court decides on them,” SEC said in the statement.
Meanwhile, Governor of the Bank of Ghana, Dr Ernest Addison, revealed recently that 95 percent of customers of the defunct Savings and Loans and Microfinance Institutions have been paid their locked up cash.
In 2019, the SEC, acting in accordance with Section 122 (2) (b) of the Securities Industry Act 2016, (Act 929) (SIA) revoked the licenses of fifty-three (53) Fund Management Companies (FMCs) on 8th November 2019, due to their inability to return clients’ funds totalling GHC 8 billion, and significant breaches of applicable rules that created risks to financial stability. The enforcement action taken by the SEC forms part of a general exercise to clean-up the financial sector.
Eight of the firms whose licences were revoked appealed against the decision to the Administrative Hearings Committee (AHC) but only three (3) were successful.
The engagement with Government was against the background that the liquidation process (securing the Court orders and realising assets) has the tendency to be long and protracted; meanwhile, providing early relief to affected investors was also important.
It was agreed that rolling out of the bailout package promised by the government would proceed after claims are validated and liquidation orders secured.
Read the full SEC statement below.