Over GHc9m investment by UCC locked up in defunct FirstBanc and Gold Coast Fund

The University of Cape Coast (UCC) has a sum of GH¢9,123,532.57 locked up in two defunct fund management companies, First Banc and Gold Coast Fund Management, following the revocation of their licences.

This was a revelation contained in the 2020 Auditor-General’s report on the public accounts of public boards, corporations, and other statutory institutions sighted by The Ghana Report.

The Acting Auditor-General, Johnson Akuamoah Asiedu, has attributed the situation to what he describes as poor financial due diligence in the university, a situation which he found to be prevalent in other state institutions.

According to the Auditor-General, if the university fails to immediately take steps to recover the money, it risks losing it.

The Management of the university has since been asked to pursue the recovery of their investments from the receivers of First Banc and Gold Coast Fund Management through the Securities and Exchange Commission (SEC).

However, the management of UCC in its response to the Auditor-General during the investigations said, said it had written to the receiver of the defunct fund management companies, PricewaterhouseCoopers (PwC) on steps to claim the lock-up investment.

The management also noted that they were awaiting the determination by the court to see the way forward since the fund management companies have gone to court on the revocation of their licences.

It was also observed that 14 projects valued at GH¢78,928,271.14 fully funded from the Internally Generated Fund (IGF) of UCC have been delayed for periods ranging between two and eight years. Of these projects, seven were between the completion’s stages of 87% and 99%.

As such, the Auditor General recommended that the Management of the university should ensure early completion of the projects to save the projects from further deterioration.

Again, the university did not have legal title to five of its properties valued at GH¢8,580,000 belonging to the School of Medical Sciences.

According to the report, though the properties were occupied by the School of Medical Sciences and formed part of the university’s assets in the 2019 financial statements, the university did not have legal titles to such properties.

On this matter, the recommendation was that the “management take immediate steps to secure title deeds for the affected properties in order to avoid losses that may arise as a result of disputes.”

In relation to this was the issue of tenancy, where the report has noted that management of the university did provide the tenancy agreement between the UCC and the Ghana Hostels Limited for the occupancy of 5.009 acres of the University’s land.

Therefore, management has been charged to provide any Memorandum of Understanding (MoU) or Rent Agreement between the university and the Ghana Hostel Limited for audit review.

SEC revokes licences of 53 fund management companies

The Securities and Exchange Commission in November 2019 revoked the licences of First Banc and Gold Coast Fund Management, who were part of 53 Fund Management Companies (FMCs) that were affected by the exercise done by the sector regulator as part of the clean-up of the financial sector.

The revocation of the licences of the companies, according to SEC, was necessary as the “companies had largely failed to return client funds which remain locked up and in a number of cases, they had even folded up their operations.”

READ ALSO: See The List 18 Mutual Funds, Unit Trusts Not Affected By The Revocation Of 53 Fund Management Licences

These actions were taken pursuant to Section 122 (2) (b) of the Securities Industry Act, 2016 (Act 929 or “the Act”) which authorises the Securities and Exchange Commission to revoke the licence of a market operator under certain conditions.

The Commission explained that the firms “have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches.”

SEC said it “has concluded after extensive engagement with these institutions that their continued existence in the light of their conduct poses severe risks to the stability of the capital market and to the interests of investors.”

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