SECURITIES and Exchange Commission (SEC)
THE SECURITIES and Exchange Commission (SEC) has indicated that the Registrar-General, official liquidator of some 22 fund management companies (FMCs) whose licences were revoked on November 8, 2019, will this month begin communicating details of the payment process of locked-up funds to clients.
It said the first phase of the bailout package for clients of the FMCs would be in the form of social intervention similar to what was done recently for depositors of the failed special deposit-taking institutions (SDIs) and microfinance institutions (MFIs) based on their validated claims.
The second phase would cover clients of the remaining companies after the liquidation orders are secured from the courts.
It said petitions in court for the official liquidation of the remaining FMCs whose licences were revoked were pending and yet to be decided on by the court.
The 22 FMCs currently under official liquidation are Alpha Cap Securities Limited, Alltime Capital Limited, Axe Capital Limited, Brooks Asset Management Limited, CDH Asset Management Limited (Intermarket), Fromfrom Capital Limited, Galaxy Capital Limited, Lifeline Asset Management Limited (Kamag), Mak Asset Management Limited, Man Capital Limited, MecEllis Investment (Ghana) Limited and Mutual Integrity Limited.
The others are Nesst Capital Limited, Nickel Keynesbury Limited, Nordea Capital Limited, QFS Securities Limited, Sirius Capital Limited, Standard Securities Limited, Supreme Trust Capital Limited, Tikowrie Capital Limited, Ultimate Trust Limited and Western Capital Management Limited.
“The Registrar General has recently published notice of the appointment as official liquidator of the 22 FMCs listed and requested creditors to submit claims. The official liquidator will follow the liquidation process established by the Corporate Insolvency and Restructuring Act 2020 (Act 1015), including calling creditor meetings and realizing value from assets that would be identified,” the SEC noted.
Background
SEC, acting in accordance with Section 122 (2) (B) of the Security Industry Act 2016, (Act 929) (SIA), revoked the licences of 53 fund management companies (FMCs) on November 8, 2019, due to their inability to return clients’ funds totaling GH¢8 billion owing to significant breaches of application rules that created risks to financial stability.
Eight of the firms whose licences were revoked appealed against the revocation decision to the Administrative Hearings Committee (AHC) but only three were successful.
Of the 50 companies whose licences remain revoked, three did not have any claims filed against them, leaving 47 companies, against whom claims were filed by affected clients.
As at August 26, 2020, a total of 98,820 claims valued at GH¢10.83 billion have been received. The commission has full access to the records of 40 of these companies, partial access to one company and no access to the remaining six companies.
The validation of the claims filed by the clients of the 40 companies where SEC has full access to the records has been completed.
The commission had partial access to records from Blackshield Capital Management Limited (formerly Gold Coast Fund Management Limited) as Blackshield Capital Management Limited provided excel data representing about three per cent of claims filed by their clients. It initially failed to assist in locating the server for validation of the remaining 97 per cent of claims till the intervention of law enforcement agencies; validation is ongoing. The claims filed against the company totaled 82,204 and valued at GH¢4.65 billion.
According to SEC, “The six companies that we do not have access to their records are Firstbanc Financial Services, Kripa Capital, EM Capital, Omega Capital, Nickel Keynesbury and Heritage Services (Future PIP Management Ltd). Validation of claims on Firstbanc Financial Services Limited is yet to commence because of their initial failure to cooperate with SEC, and a filing of an application for an injunction pending appeal at the high court.
“Claims filed against Firstbanc Financial Services Limited was 423 valued at GH¢800 million. We are in the process of resolving the issues to get full access to the records of the remaining five firms. The claims filed against these five firms are 489, valued at GH¢87 million,” it stated.
BY Samuel Boadi