Finance Minister Dr. Mohammed Amin Adam has announced the release of GH₵700 million to customers whose funds have been locked up in collapsed fund management companies.
This is the first part of a GH₵1.5 billion allocation detailed in the 2024 mid-year budget review to assist affected parties.
During a monthly economic update on Thursday, August 29, Dr Amin Adam stated that the total amount would be distributed in three instalments.
“We had indicated in the 2024 mid-year review of fiscal policy that the government has approved the disbursement of an additional GH₵1.5 billion to provide relief and bailout to people whose funds have been locked up in fund management companies.”
Dr. Adam stated that the first GH₵700 million has been processed and sent to the Securities and Exchange Commission for distribution to affected customers.
The remaining GH₵800 million will be released in two additional instalments.
Dr. Amin Adam emphasized that this fund distribution aims to ease the financial strain on individuals impacted by the collapse of fund management companies and provide crucial relief.
“I’m glad to inform you that the Ministry of Finance has processed the release for the first tranche of 700 million Ghana cedis of the additional GH₵1.5 billion for the Security and Exchange Commission to further bail out the remaining customers whose funds were locked up including Black Shield Funds Management customers.”
“Yesterday, I instructed the Controller and Accountant General to release the funds to mitigate the stress on affected persons. The 1.5 billion cedis will be released in three tranches.”
Background
In 2022, the Securities and Exchange Commission(SEC) revoked the licenses of 53 fund management companies (FMCs) as part of a broader financial sector cleanup, in line with Section 122 (2) (b) of the Securities Industry Act (SIA), 2016 (Act 929).
Eight of these companies appealed the decision to the Administrative Hearings Committee (AHC), but only three appeals were successful.
In response to the license revocations, the SEC took several protective measures for investors. These included notifying the Registrar of Companies to petition the court for the official liquidation of the 53 FMCs. Additionally, an agent was appointed to secure the companies’ assets by taking records and locking up premises.
This agent was also responsible for receiving, acknowledging, and validating claims from affected clients, as required by the SIA.
This situation has led to multiple demonstrations and picketing at the Finance Ministry by victims of the collapsed fund management companies.