Dr Mohammed Amin Adam
In a move aimed at providing financial relief to investors affected by the 2019 fund management industry license revocation, the government has announced the release of GHS1.5 billion to continue the bailout program.
This amount is in addition to the GHS4.46 billion previously released to affected investors with examined claims.
The Securities and Exchange Commission (SEC) announced in a public notice, stating that the GHS1.5 billion will be released in three tranches, commencing with the first tranche of GHS700 million in August 2024, and GHS400 million each in October 2024 and December 2024.
This bailout program is a result of the government’s efforts to mitigate the impact of the license revocation on investors.
In November 2019, the SEC revoked the licenses of several fund management companies, including Blackshield Capital Management Limited (formerly Gold Coast Fund Management Limited) and Kron Capital Limited, due to their failure to meet the required capital adequacy ratio.
The revocation of the licenses left thousands of investors stranded, with many unable to access their investments.
The government’s bailout program is aimed at providing financial relief to these investors, who have been waiting for over two years to recover their investments.
According to the SEC, the bailout money released so far has been used to pay a total of 84,202 investor claims, out of which 69,445 (representing approximately 82%) have been fully settled.
This current release of GHS1.5 billion is expected to provide further financial relief to those impacted by the revocation.
Under this current release, investors will receive the higher of GHS50,000 or 15% of their outstanding examined claims on the defunct firms.
This top-up is estimated to result in close to 91% of affected investors being fully settled.
The bailout will be rolled out through the Special Purpose Vehicle, Amalgamated Mutual Fund (AM Fund), managed by GCB Capital Ltd.
The managers of AM Fund will hold a meeting in the coming days to guide those who would want to access the released funds as well as the prospects for leaving the claims in the AM Fund to be managed.
Investors can access more information and updates on the bailout portal or contact the SEC-appointed Agent, PricewaterhouseCoopers (Ghana) LTD (“PwC”) via email at gh_fundmanagers@pwc.com or +233 (0) 242 439 453. Alternatively, investors can contact GCB Capital Limited at amfund@gcb.com.gh or +233 (0) 242 439 476.
The SEC has assured investors that the bailout program is a testament to the government’s commitment to protecting the interests of investors and promoting the growth and development of the securities market.
Background
The 2019 fund management industry license revocation was a result of the SEC’s efforts to clean up the industry and ensure that only licensed and qualified fund managers operate in the market.
The revocation of the licenses was followed by a series of measures aimed at mitigating the impact on investors, including the establishment of a bailout program.
The bailout program was established to provide financial relief to investors who had invested in the affected fund management companies.
The program has been ongoing since 2020, with the government releasing several tranches of funds to settle investors’ claims.
-BY Daniel Bampoe