Mr. Eric Nana Nipah, the Receiver of the defunct 347 Micro Finance Companies, 23 Savings and Loans and Finance House Companies, has indicated that he is undertaking a thorough tracking of defunct financial institutions’ owners assets.
According to him, this will expedite the process of him gaining access to more liquidity in settling outstanding claims following the folding of the companies.
The assurance by the Receiver comes on the back of an announcement by the Bank of Ghana that it will pre-finance payments to former workers of these entities. The Central bank says the decision was taken to mitigate the economic impact of COVID-19 on the ex-staff.
Background
On Monday July 13, 2020, The Receiver, Eric Nana Nipah began negotiations with authorized representatives of former employees of the defunct 347 microfinance firms and 23 savings and loans companies and Finance House firms to pay them their full outstanding salaries and negotiated and exit packages.
This happened on the back of the Bank of Ghana resolve to pre-finance the payment of the ex-staff in the wake of the impact of the COVID-19 pandemic and individuals and businesses.
He said, “To ameliorate the economic impact of the resolution exercise on former employees of these affected companies particularly in these times of COVID, Bank of Ghana has agreed to pre-finance the full settlement of employee related claims which otherwise rank as Unsecured claims in the receiverships of these companies”.
Also, “the Receiver will in the week commencing Monday, 13 July 2020 engage with the authorized representatives of the ex-staff to agree on modalities for the payment of outstanding salaries and exit packages to ex-staff of these resolved institutions.”
Despite the decision to pay all outstanding debt, he noted that the full settlement of outstanding salaries of former employees of the collapsed bank will be made once they have been validated, agreed and also in the validation process.
“In line with the hierarchy of creditor claims set out under Act 930, other creditors of the failed institutions will be settled by the Receiver upon validation of their claims and to the extent that the Receiver is able to realize value from the remaining assets of these institutions”.
Eric Nana Nipah
Meanwhile, the Bank of Ghana, between 2017 and 2019, revoked the licenses of nine local commercial banks and over four hundred financial institutions comprising Micro-finance, Savings and Loans as well Finance Houses, for violating various regulations guiding their operations.
This affected about 4.6 million depositors whose monies could have been lost completely had the regulators not taken the action.
It all began in August 2017, when the Bank of Ghana (BoG) gave GCB Bank Ltd the green light to acquire two local banks UT and Capital bank due to severe impairment of their capital.
Later in August 2018, the Bank of Ghana consolidated five other local banks into the Consolidated Bank Ghana Limited
