GHC1.7billion paid to clients of collapsed investment firms – SEC

Rev. Daniel Ogbarmey Tetteh

The Securities and Exchange Commission (SEC) has paid GHC 1.7billion to clients of some 47 collapsed fund management companies.

The government offered full and partial bailouts to cushion the clients from hardships as the COVID-19 worsened the situation of these victims.

GHC 768 million has been paid to 6,916 claimants as full bailouts, while GHC 994 million has gone to 52,264 claimants as a partial bailout.

This was contained in a statement released on Friday, April 30.

The release further explained that the partial bailout authorized by the government has resulted in about 66% of claimants (all categories) being fully paid.

Claimants with validated claims above the GHC50,000 threshold have been asked to exercise patience to access the full bailout package when liquidation orders for the companies are completed.

“There is thus no need to resort to any middlemen or facilitators to secure payout of the bailout,” SEC cautioned.

SEC assured all affected clients that the government had made provision to cover all validated claims with the recent additional allocation in the 2021 National Budget Statement to support the clean-up exercise in the asset management industry.

“There is hence no need for any affected client to panic because of the protracted court liquidation process”.

Parliament approved a provision of GHC 5.5 billion in the 2021 Budget for the exercise.

It would be recalled that SEC revoked the licenses of 53 investment companies in 2019, which was scaled down to 47 after court processes.

The reason was the companies’ failure to “return client funds which remain locked up and in a number of cases, have even folded up their operations.”

SEC also explained that the revocation is “in accordance with its mandate of protecting investors and the integrity of the capital market.”

In its latest update, SEC indicated the courts had granted 37 liquidation orders to the Official Liquidator, the Registrar-General, as of March 31, 2021.

So far, Virtual Creditor and Class meetings have been held by the Official Liquidator for clients of 34 out of the 37 companies.

Out of a total of 100,898 claims received against 47 companies valued at GHC 11.70 billion, a total of GHC 100,700  claims valued at GHC 8.314 billion have so far been validated.

This means that an estimated 99.8% of the total claims filed have been validated, with an almost 30% found to be unwarranted.

Claimants who disagree with validated amounts are engaging the agent of the SEC for further examination.

Liquidation orders for 10 companies are still pending in court.

These are:

         Apex Capital Partners Ltd.

        Beige Capital Asset Management Ltd.

        Blackshield Capital Management (formerly Gold Coast Fund Management Ltd).

        Dowjays Investment Ltd.

        Frontline Capital Advisors Ltd.

        Kron Capital Ltd.

        Liberty Asset Management Ltd.

        Omega Capital Ltd.

        Universal Capital Mgt. Ltd.

        Wealth Vision Financial Services Ltd.


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