Receiver To Fully Settle Ex-Staff Of Defunct Firms

Eric Nana Nipah

EX-STAFF of some 409 resolved institutions which were ushered into receivership by government are to receive full payment for their outstanding salaries and exit packages preferably before this month ends.

The Receiver is expected to pay GH?7.5 million in salary arrears to the ex-staff, while GH?144.3 million will be paid in compensation to them.  These include the negotiated settlement/full settlement of all outstanding salaries post-receivership.

Cash payment and other payments would be made through Consolidated Bank of Ghana (CBG).

Payment Terms

A summary of the terms/parametres agreed with ex-staff representatives during the exit package negotiations included under Section 135 (b)(viii) was that employees would receive  three months basic salary per each year of service; they would be entitled to accrued outstanding leave days for  2019 to be commuted to cash; they have an option of first right of refusal to purchase official cars assigned to staff prior to receivership;  while also their medical insurance for 2019 was allowed to run till expiry. Again, they would be entitled to validation and payment of outstanding medical bills as at receivership date; and offered a 30% discount on all outstanding loans.

Claims Of Ex-Staff

Of the 409 resolved companies, 209 were negotiated with. 155 MFIs had ceased operations prior to receivership date, and there are currently no employee records available on these institutions.

Negotiations and computations are currently ongoing for 15 microfinance institutions. Also two savings and loans companies had ceased operations and closed prior to receivership while there were no employee records for 28 microcredit companies that had ceased operations prior to the revocation date.

Key challenges

These remained the lack of access to employee data for verification and computation of exit packages and the availability of funds to settle negotiated and agreed exit packages given the poor asset quality of most of the resolved companies and the timing of realizations. Given the foregoing situation, the Receiver has referred some matters to EOCO for investigations.

No Records

Furthermore, there is paucity of records, in that 36 companies have no records and this has resulted in delays in validating claims on these resolved institutions; there have been physical threats and safety of Receiver and his representatives,  ongoing legal suits by shareholders/directors of three institutions, i.e. GN, CDH and Unicredit. Also there is an impact of Covid-19 on asset realizations, while there is a volume of investigative work to be conducted by EOCO.

Overview on staff to be paid

There are 347 microfinance institutions whose staff total 2,036 with a monthly payroll value of GH¢6.0 million as at Receivership, while the 23 savings and loans companies had 3,547 staff with a monthly payroll value of GH¢7.0 million. In the case of the 39 microcredit companies, they had 54 staff with a monthly payroll of GH¢100,000.

In all, a total of 5,637 staff with a payroll of GH¢13.1 million will receive their packages.

A total of 1,916 project associates were engaged by the Receiver on a monthly payroll of GH¢1.3 million so this brings the total employees to 7,553 with a GH¢14.4 million monthly payroll.

Current staff of Receiver

Following a gradual phasing out process, the current staff strength of the Receiver/Official Liquidator is approximately 2,000 with a monthly payroll of approximately GH¢5.0 million.  This excludes former staff of some resolved companies which were not operational at date of receivership.

BY Samuel Boadi