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    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

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    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

    Fuel prices to rise marginally in second pricing window of May – IES

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    The seven factors driving high cost of living in Ghana

    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

    Over 120,000 persons reimbursed for wrongful e-levy deductions – GRA

    Fuel shortage: New policy to ensure direct delivery of fuel products underway – NPA

    Current high inflation rate not an isolated event – Seth Terkper

    Ghana needs more entrepreneurs to check imported inflation – Finance Minister

    Fuel prices to rise marginally in second pricing window of May – IES

    Samuel Dubik Mahama appointed ECG Managing Director

    Gov’t to put measures in place to reduce ‘imported inflation’ – Ofori-Atta

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    A petrol station worker fuels a car along Kimathi street on July 14 2019,after the Energy and Petroleum Regulatory Authority (EPRA) announced new retail pump prices of petroleum products effective from July 15 to August 14, 2019.price of super petrol increase by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and SH2.31 per litre respectively.PHOTO|SILA KIPLAGAT

    NPA allays fears of fuel scarcity in the country

    Fuel prices to rise marginally in second pricing window of May – IES

    Gov’t to put measures in place to reduce ‘imported inflation’ – Ofori-Atta

    Businesses will pass on increased cost of production from high utility tariffs – GNCCI

    KIC and Mastercard Foundation launch Agri-MSMEs acceleration program

    Benjamin Dzoboku appointed as new Managing Director for Republic Bank Ghana Plc

    Gov’t to launch national airline to benefit from AfCFTA – Hassan Tampuli

    Accra Brewery PLC launches thematic campaign dubbed ‘Taste no yɛ Deep’

    BoG reiterates calls for public to report unapproved banking charges

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    Government to invest heavily in internet safety – Ursula pledges

    Ho Node Hub rebrands as Node Eight

    Elon Musk strikes deal to buy Twitter for $44bn

    Block chain’s success will depend on supportive policy environment – Prof. Quaynor

    1.5% E-Levy rate will negatively impact GH¢6.9 billion target – Prof. Quartey

    Transactions to be affected by E-levy

    Bethniel Finance emerges winner in Innovation Challenge Program

    Taxing of non-resident e-commerce entities in Ghana could push prices up – Technology Consultant

    BoG cautions against fraudulent money-doubling scheme ‘BitCash Currency Exchange’

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    Greater, more diverse participation in global trade is key to achieving Africa’s economic transformation – World Bank

    Seth Terkper advises against e-levy; urges government to run to IMF

    AfCFTA members conclude negotiations on rules of origin to enhance free trade

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    Strict enforcement of AfCFTA regulatory framework will ensure smooth implementation of PAPSS – Bawumia 

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Over GH¢8 billion investors’ cash locked up with collapsed fund managers

bycitibusinessnews
November 10, 2019
in Banking And Finance, Economy, Government
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The 53 fund management companies that had their licenses revoked by the Securities and Exchange Commission (SEC) were managing customers’ funds which run in excess of GH¢8 billion, Citi Business News’ sources say.

The source close to the regulator said the affected companies were managing funds belonging to some 56,000 customers who had invested in various products offered by these firms.

The capital market regulator announcing the mass shut down exercise last Friday said customers’ ability to access their funds will depend on the kind of investment their respective fund managers had made.

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“Investments in listed companies, mutual funds, and government of Ghana instruments will not be affected as they are typically held by third parties such as custodians and the central depositary. Other investments will be sorted out through the realisation of assets subject to the court appointing the Registrar-General as the Official Liquidator,” SEC stated.

Unlike the banking sector reforms where a receiver was immediately appointed to take over collapsed banks, the capital market regulations stipulate that the resolution of these fund managers be done through an official liquidator which will be appointed by a High Court working through the Registrar-General.

Funds retrieval

Customers who have funds locked up in these companies, the regulator said, will be expected to go through a validation process where they submit their respective claims for payments.

The details of the validation process and specific locations where investors can present their claims to be validated will be provided by SEC by close of business on Monday, November 11, 2019,

“In the interim, we urge all investors to remain calm, gather all receipts, statements and any other documentation related to their investment with the affected institutions,” the regulator said in its statement.

In an effort to cushion the overall impact of this mass exercise on the over 56,000 customers, SEC confirmed that the government has set aside some funds to be paid to all the affected investors.

“The authorized agent of SEC (and the Liquidator once appointed) will work together with the Government to pay a capped amount to all affected investors of these firms in line with Government commitment to support the securities industry and to provide some immediate relief to investors who are hurting because of their locked-up funds,” the regulator revealed.

It is not immediately known how much the government has set aside to placate these investors as spokespersons for the regulator remain tight-lipped.

In all, whether investors will be able to retrieve all of their locked-up cash depends on how quickly the assets of these collapsed companies are retrieved and liquidated.

Reasons for the shutdown

According to SEC, this action was taken in accordance with its mandate of protecting investors and the integrity of the capital market.

The revocation of the licenses of the specified companies, SEC said, became necessary as they have largely failed to return client funds which remain locked up and in a number of cases, they have even folded up their operations.

“Essentially, they have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches,

Financial sector reforms

The cost of the capital market clean up adds to the far-reaching effects of the banking sector reforms which saw nine local banks losing their licenses.

The Bank of Ghana banks’ clean-up was followed by the shutdown of some 386 microfinance and money lending institutions.

Subsequently, 23 non-bank financial institutions (NBFIs) made up of savings and loans companies and finance houses had their licenses also revoked over several regulatory breaches including the inability to pay customers’ deposits.

In all of these instances, a receiver was appointed by the central bank to go after the good assets of these companies and ensure the payment of customers’ funds. The government also set aside some monies to augment what will be retrieved by the receiver.

According to Finance Minister Ken Ofori-Atta, close to GH¢14 billion of the taxpayers’ monies has been spent on the financial sector clean-up. This amount excludes the resolution of the 23 NBFIs as well as what has been budgeted for the capital market clean up.

Presenting the mid-year budget in July 2019, the Finance Minister hinted that the cost of the overall financial sector clean up could rise to about GH¢21 billion by the close of the year.

With Mr. Ofori-Atta presenting the 2020 budget statement to Parliament this week, he will be expected to state how much the government will be committing to ease the crisis in the capital markets.

 

List of companies shut down

 

 

 

 

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