Blackshield clients, others won’t be excluded in bail-out despite fight with SEC
No one will be excluded in the government bailout for the 53 defunct Fund Management Companies (FMCs), the Securities and Exchange Commission has assured.
SEC said the process to pay the locked-up funds of customers would be in stages and all valid claims that are verified would be honoured.
Some affected customers stormed the premises of the Finance Ministry to express their displeasure after SEC announced that some companies had been put aside.
SEC explained challenges to access documents and court action to contest the revocation of licences has hindered its processes.
“We wish to assure all affected clients that the government bailout package is all-inclusive, provided claims have been validated and liquidation orders secured.
“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 bailout will be done in phases,” the release indicated.
SEC also used the opportunity to address concerns of Blackshield Capital Management Ltd (formerly Gold Coast) about the sidelined of its customers for the bailout.
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According to SEC, Blackshield has alleged the regulator issued a public notice in 2017 directing that their Structured Finance (SF) product should be discontinued within six (6) months from the date of the directive.
SEC said another allegation was that the singular directive set into motion unprecedented demands for redemption by customers of Blackshield and other fund managers leading to a backlog in payment.
But the regulator insists that it is inaccurate for Blackshield to suggest so.
“The SEC did not issue a public notice in 2017 directing that the SF product be discontinued,” the release noted.
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Providing further details, the regulator said ,in June 2018, it held a meeting with the Executive Management and Board members of market operators.
At the meeting the operated were reminded that the practice of offering guaranteed returns to their clients was illegal and that SEC was going to enforce an earlier directive issued in 2014.
The SEC asked the fund managers to unwind any positions as the contracts matured between July and December 2018.
SEC also discounted claims by Blackshield that approval for an alternate product to address the needs of customers was declined.
Background
SEC over the weekend said the government was set to announce a bailout package for clients of the 53 defunct Fund Management Companies (FMCs).
According to SEC, the package will be given in phases with the first phase covering clients of the twenty-two (22) companies currently under official liquidation.
It further noted that the Official Liquidator, the Registrar General, will communicate details of the payment process to affected clients starting in September 2020.
It, however, noted that no action could be taken for clients of Blackshield Capital Management Limited, Firstbanc Financial Services Limited, Apex Capital Partners and Ideal Capital Partners Limited since they have filed applications in court to challenge the revocation of their licences by the Securities and Exchanges Commission.
The police said the leaders were arrested for unlawful protest as the group embarked on the action without police notice.