The Securities and Exchange Commission (hereinafter referred to as ‘SEC’), acting within its mandate of protecting investors and the integrity of the securities market, has updated the general and investing public on the status of the Bailout implementation program, specifically on Blackshield Fund Management Company Limited (formerly Gold Coast Fund Management Limited).

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 various regulatory breaches including their inability to return clients’ funds estimated at eight billion cedis (GHS 8 billion), and significant breaches of applicable rules that created risks to financial stability.

The licences were revoked in accordance with the mandate of SEC to protect investors and the integrity of the capital market. Following the revocation of the licences, the SEC took the following actions to protect investors: firstly they notified the Registrar of Companies/Registrar General to petition the Court for orders to commence the official liquidation of the fifty-three (53) FMCs under the relevant law.

Secondly SEC appointed an agent in line with the relevant provisions of the SIA, to take copies of records and lock up premises to secure the assets of the affected companies. It then engaged the Government through the Ministry of Finance on a bailout package for affected clients of the FMCs.

The Government agreed to the latter on two conditions: firstly, that liquidation orders must be granted by the courts; secondly, validation of claims of claimants should also be completed. Without these conditions, the full bailout cannot be rolled out. SEC is currently working with these conditions.

Securities and Exchange Commission 1 — SEC Issues Implementation Bailout Program for Black shield Fund Management Formerly Called Gold Coast 3

SEC mandated the agent to receive claims from the clients of the affected companies, acknowledge receipt of same and conduct validation of claims received from affected clients.

Concerns of Clients of Blackshield/Gold Coast

The SEC said it noted some public comments by clients of Blackshield/Gold Coast and responded accordingly. One is the purported Release of GHS5.5 billion approved by Parliament for Blackshield/Gold Coast.

“The SEC has noted comments by representatives of Blackshield/Gold Coast clients for the disbursement of the GHS 5.5 billion Ghana cedis approved by Parliament and wishes to clarify that the amount approved by Parliament was for all investors of the 47 companies that had claims by investors and not for Blackshield/Gold Coast investors only.

“All investors with validated claims have therefore been contacted by Amalgamated Fund and GCB Capital Ltd., the entities managing the implementation of the Bailout. The Government has yet to release the full GHS 5.5 billion to the implementing agencies of the Bailout.”
SEC

SEC indicated that the update received by the institution from the implementing agencies of the Bailout is that so far, GHS 4.6 billion has been allocated as follows: GHS3.1 billion to Amalgamated Fund Tier 1 payments and GHS1.45 billion assigned to Amalgamated Fund Tier 2 payments.

This disbursement, it said includes the partial bailout program which entailed the payment of a sum of up to Fifty Thousand Ghana Cedis (GHS 50,000) to clients of Blackshield/Gold Coast and other companies who had not received Winding up orders from the Court by October 2020 but whose claims had been validated.

“The total amount paid to Blackshield clients in the partial bailout is GHS 1.34 billion covering a total of 73,541 investors. Out of this amount, a total amount of GHS 757,539,141 has been used to fully settle 61,734 customers of Blackshield.”
SEC

The SEC wishes to appeal to all affected clients to remain calm and rely only on information provided by the SEC and the Official Liquidator.

SEC is the statutory body mandated by the Securities Industry Act 2016 (Act 929) as amended by the Securities Industry (Amendment) Act 2021, Act 1062 to promote the orderly growth and development of an efficient, fair, and transparent securities market in which investors and the integrity of the market are protected.