The former Deputy Finance Minister, Hon. Abena Osei Asare, has stated that the government’s inability to pay the funds of investors affected by the financial sector clean-up is largely due to a shortfall in revenues. She indicated that the government has not yet allocated money to pay the outstanding balance to investors and assured that these funds will be paid as soon as the revenues are available.
She disclosed that an amount of GH₵ 3.1 million was paid to fund managers while GH₵ 5.5 million was paid to savings and loans. She indicated that originally, a sum of GH₵ 8.6 billion was allocated to make payments to investors of defunct institutions, however, the actual amount of GH₵ 1.36 billion was paid to investors as a result of the litigation process which compelled the government to halt payment.
Recently a petition was presented to parliament to probe the government’s inability to pay the investors of Blackshield Capital Limited years after the banking sector clean-up. This is besides the fact that the Securities and Exchange Commission (SEC) allocated GH₵ 8.6 billion to pay all investors of the affected institutions.
According to Parliament, the Minister of State Designate at the Ministry of Finance, Hon. Abena Osei Asare, also justified the government’s decision to close down the Blackshield Capital Limited as well as some other Financial Institutions as part of the financial sector clean-up exercise during a probe into the defunct Blackshield Capital Limited conducted by Parliament.
“Additionally, she indicated that Parliament had approved a sum of GH₵ 3.1 million in the 2020 midyear budget, adding that the Government has provided an amount of GH₵ 3.4 billion to help pay validated claims to investors. She pointed out that, the amount was in a combination of a three-year veritable bond of GH₵ 2.5 billion as well as a five-year Eurobond of GH₵ 950 million”.
Parliament of Ghana
Government Bailout On Humanitarian Grounds.
Furthermore, the Member of Parliament of Atiwa East revealed that as a means of supporting the banking sector after the clean-up exercise, the government allocated an additional sum of GH₵ 1.4 billion for bailouts. She clarified that each investor received an amount of GH₵ 50,000.00 as a partial bailout out of this fund.
Accordingly, Hon. Abena Osei Asare noted that the bailout exercise undertaken by the government is purely based on humanitarian grounds to provide relief for investors who have gone years without any payment.
“The bailout is ongoing to fully settle 80 % of claimants including 89 % of individuals below 60 years. Even though in the 2020 budget review, SEC asked for GH₵ 85million, an amount of GH₵ 3.1 million was paid to the sectors”.
Hon. Abena Osei Asare
In the case of the non-payment of the bailout funds to Blackshield Capital, the Securities and Exchange Commission (SEC) pointed out that the Ministry of Finance should not be answerable for the delay in payment of bailout funds to the affected investors.
The SEC disclosed that the delay is primarily due to the legal action by Blackshield contesting the liquidation petition brought by the Office of the Registrar of Companies at the request of the SEC following the revocation of licenses.
Commenting on the unpaid funds of investors, the Chairman of the Special Committee that conducted the probe, Hon. Joe Ghartey – MP Esikado Ketan – assured customers of Blackshield Capital Limited and other companies that the committee is working assiduously to investigate the issues and present a report to Parliament.
The Banking Sector cleanup was undertaken by the incumbent government in 2018 as a tactic of setting the country’s financial sector right. The exercise saw the collapse of many financial institutions that did not meet the requirements as stated by the Bank of Ghana.
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