The government has authorized a partial bailout involving a partial payment of an amount of Fifty Thousand Ghana Cedis (GHS50,000) to all aggrieved customers of failed Fund Management Companies “while the court process on the liquidation petition and other matters continue”.
This is according to a press release issued by the Securities and Exchange Commission (SEC) today, November 18, 2020 in pursuant to section 208(c) of the Securities Industry Act, 2016 (Act 929).
“The decision to make this partial payment is predicated on the Government’s commitment to protecting its citizenry and its sensitivity to the plight of affected clients compounded by the disruptive impact of the Covid-19 pandemic,” the Commission revealed.
Throwing more light on the reason for arriving at this decision, SEC said the “intervention has become necessary at this stage because liquidation petitions for the remaining affected Fund Management Companies are currently at different stages”.
“Some affected Fund Management Companies like Gold Coast Fund Management Limited (now Blackshield Fund Management Company Limited) are contesting the liquidation petition and as a result, have filed a Stay of Proceedings until its application for judicial review of the decision of the Administrative Hearings Committee has been heard”.
This may delay the legal processes, aggravating the pain and suffering of the affected investors hence the decision by the government to make partial payment, SEC added.
Detailing the beneficiaries of the GHS 50,000, SEC said “the partial bailout would cover all clients of the failed Fund Management Companies whose licenses were revoked but are yet to come under official liquidation including customers of Blackshield Fund Management Company Limited”.
“The partial bailout would cover a total of 92,460 claims filed against the remaining 27 Fund Management Companies, out of which Blackshield Fund Management Company Limited accounts for a total of 84,656 (92%) claims. Claims filed by individuals (including pensioners) is 86,506 with Gold Coast Fund Management Limited (now Blackshield Fund Management Company Limited) accounting for 80,018 (92.5%) of these claims”.
“The partial bailout being offered would result in 89% and 82% of affected individuals and pensioners being fully settled respectively. Validated claims in excess of this partial payout amount shall be covered after the liquidation proceedings in Court, in line with the terms being applied under the bailout package for the clients of the Fund Management Companies currently under official liquidation”.
Finally, SEC, acting within its mandate of protecting investors and the integrity of the market cautions aggrieved customers that the partial bailout shall be channeled through “the Amalgamated Fund Ghana Limited, the same Special Purpose Vehicle (SPV) being used to pay the clients of the Fund Management Companies currently under official liquidation”.
“Amalgamated Fund Ghana Limited is managed by GCB Capital Limited, a subsidiary of GCB Bank Limited. The SEC’s agent for receiving and validating claims is PwC”.
