Ghana: Revocation of Licenses of Fund Managers in Clients' Interest - SEC

14 November 2019

The Securities and Exchange Commission says its decision to revoke the licences of 53 defaulting fund management companies is in the best interest of their clients.

Mr Emmanuel Ashong-Katai, Head, Policy Research and Information Technology, therefore, urged the investors not to panic because the Commission's mandate was to secure investor protection.

"We are doing all these for the purposes of investor protection. We are doing all these in the interest of the investors, because we can't sit back to allow investors to suffer," Mr Ashong-Katai stated in an interview with the Ghana News Agency, in Accra.

"They (clients) have invested and their investments have matured and they are not getting it because of the bad business practices of those firms, whose licences that we have revoked. We don't want them to continue to suffer," he said.

He explained that the Registrar-General would take the matter to the High Court for permission to be granted for them to liquidate the defunct companies and thereafter a liquidator would be appointed.

The liquidator he said would then trace the assets of the defunct companies, including third party assets; bringing all these assets together into a common pot.

"These assets would be disposed off (sold) and the revenues generated be used to pay the investors. "So, we are begging them to keep their records intact, their statements, their receipts, and everything intact, because that is what they will use to claim what belongs to them," he said.

Mr Ashong-Katai said the government had taken note of the plights of investors, and had decided to commit certain a amount of money to pay them some cap amount.

"Every investor, who is able to present their claims, will get certain amount from the government," he said.

On how long would it take for a liquidator to be appointed, Mr Ashong-Katai said the Registrar-General would immediately appoint one as soon as the Court granted the request liquidation.

"In fact per the timetable we have it shouldn't be more than 10 days. Within the next ten days we hope that a liquidator will be appointed. It can be earlier than that," he said. "But now we are also working with Price Water House and Coopers. Maybe PWC may be the liquidator. In fact, PWC has been earmarked to be appointed as the liquidator," he said.

He said the Commission had the powers to secure the premises of the firms to ensure that all records were kept intact; stating that the PWC Ghana had already moved in to secure the premises first on their behalf.

Mr Ashong-Katai said there were some fund management companies who were doing well in Ghana at present. The good ones are more than 10, and the Commission would soon publish their names.

"We have them (good fund management companies) on record but because of these bad nuts... everybody is tainted in the market." "Some of them are very good, with very good liquidity and their capital base is solid; and they don't have problems at all paying claims".

"We will publish the names of those in good standing very soon so that the Ghanaian public investors can have the confidence to work with them". The exercise was, therefore, to separate the bad nuts from the good ones.

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