The Progressive People’s Party (PPP) is asking the Securities and Exchange Commission (SEC) for the whereabouts of over GHC8 billion funds approved by parliament for the payment of customers of all affected fund management companies as a bailout.
According to them, there is no excuse for the government to wait for a liquidation order for BlackShield/Gold Coast assets before making customer payments.
“We are also curious and asking the government the whereabouts of the 3.1 billion Ghana Cedis and 5.5 billion Ghana Cedis funds approved by parliament in the 2020 and 2021 budgets, respectively, for the payment of customers of all affected fund management companies as a bailout. Remember, there was no conditions attached to this bailout for the payment of the affected customers. On the basis of that, the Director-General of the Securities and Exchange Commission (SEC), Rev. Daniel Ogbarmey Tetteh, stated categorically the following in a press release on 2nd September, 2020: ‘The SEC reiterates the fact that there is no plan to exclude any group of customers, and as indicated in our last press release, the roll-out of the government’s bailout will be done in phases’. We demand explanations to what has happened to this arrangement,” a statement issued by the PPP read.
The PPP said the government had not shown commitment to retrieving customers’ locked-up funds three years after the company’s license was revoked.
“It is shocking that after three years of the revocation, the government has refused to pay the affected customers, and there are continuous agitations all over the country due to the severe impact this unfriendly decision by government has brought on the customers,” the statement added.
Therefore, the PPP calls on the government and SEC to pay all affected customers of the BlackShield/Gold Coast Fund Management Company immediately.
It will be recalled that in November 2019, SEC withdrew the licences of 53 fund managers following their failure to comply with the industry’s requirements and, in some cases, absconding with depositors’ funds.
In a public notice released by the regulator, SEC said there were no other means of saving these companies than revoking their licences as they have largely failed to return client funds which remain locked up and, in a number of cases, have folded up their operations.
The continuous existence of these companies, from the regulator’s perspective, posed severe risks to the stability of the capital market and the interests of investors, hence the decision to eliminate them from the system.
Against this backdrop, the PPP has made a series of demands to push for the government’s intervention in retrieving their locked-up funds.
Below is the statement from the PPP
PAY GOLD COAST/BLACKSHIELD CUSTOMERS NOW – WHERE ARE THE MONIES PARLIAMENT APPROVED FOR THE BAILOUT IN 2020 AND 2021 BUDGETS?
The Progressive People’s Party (PPP) is asking the government and the Securities and Exchange Commission (SEC) to pay all affected customers of the BlackShield/Gold Coast Fund Management Company with immediate effect.
It could be recalled that in November 2019, government through SEC revoked the license of GCFM. Before the revocation, GCFM presented a proposal to government to allow the company repay all affected customers within three-year period under a new fund management arrangement called Cardinal Fund. This proposal by the owners and managers of GCFM/BlackShield was flatly rejected and government promised to repay the affected customers after the revocation.
It is shocking that after three years of the revocation, government has refused to pay the affected customers and there are continuous agitations all over the country due to the severe impact this unfriendly decision by government has brought on the customers. We are also curious, and asking government the whereabout of the 3.1 billion Ghana Cedis and 5.5 billion Ghana Cedis funds approved by parliament in the 2020 and 2021 budgets respectively for the payment of customers of all affected fund management companies as bailout. Remember, there was no conditions attached to this bailout for the payment of the affected customers. On the basis of that, the Director General of the Securities and Exchange Commission (SEC), Rev. Daniel Ogbarmey Tetteh stated categorically the following in a press release on 2nd September, 2020: ‘The SEC reiterates the fact that there is no plan to exclude any group of customers, and as indicated in our last press release, the roll out of the government’s bailout will be done in phases’. We demand explanations to what has happened to this arrangement. We believe the customers deserves better in this arrangement so government should urgently fulfil its pledge by paying the affected customers because, our taxes has been collected for this purpose.
It is important to emphasize that there is no excuse for government to wait for a liquidation order for BlackShield/Gold Coast assets to be issued before making payments to customers as the government want us to believe. Because, under a different arrangement with banks affected in the same financial sector clean-up exercise, owners of these financial institutions are in court challenging the decision of the Bank of Ghana and the Receiver for the revocation of their licenses. Yet, customers are being paid. Besides, agreement signed by customers of affected fund management companies whose funds has been validated shows they are no longer customers of GCFM/BlackShield but are customers of a different fund manager approved by the Securities & Exchange Commission (SEC), called the Amalgamated Fund, managed by Ghana Commercial Bank Ltd which guarantees payment for the affected customers. What then is the reason for the delay in paying the customers?
More worrying, there has been a general acceptance and public declaration by the President, the Vice President, the Minister of Finance, the Minister of Works & Housing and Roads & Highways Minister that, indigenous Ghanaian contractors who acquired loans from the affected fund management companies are owed significant sums of money. However, the Ministry of Finance & Economic Planning led by Mr. Ken Ofori-Atta has been selective in determining which contractors are paid and which ones should not be paid and directing funds to financial institutions to pay some contractors bypassing the original lenders with impunity. This has the potential of denying the original lenders funds due them and likely to cause huge judgement debts and financial loss to the state.
The PPP, therefore, demand that government does the needful by paying investors their monies and save the suffering of the affected customers of these fund management companies.
Sign:
Felix Mantey
Director of Communications