The Director-General of the Securities and Exchange Commission (SEC) Rev. Daniel Ogbarmey Tetteh on Monday, November 11, 2019, made an appearance on Citi TV’s current affairs programme, Point of View, to answer questions on the regulator’s decision to shut down 53 fund managers.
As part of the show, viewers were asked to send their questions for Rev. Ogbarmey Tetteh to provide responses to.
The SEC boss who could not provide immediate responses to all the questions sent promised he would get back to viewers at a later date with answers to all the questions they sent.
Below are the questions sent in by viewers and the responses provided by SEC.
Q1. Please ask Rev. What does he mean by paying
customers’ investment by capping as stated in your released statement on your website.
Ofori, Pantang.
Answer:
The government, as part of measures to provide immediate relief to investors, has committed to making some payment. This initial payment, which is yet to be determined, will be a capped amount that is intended to provide immediate relief to investors whose funds have been locked up.
Q2. Hello Bernard. The regulators and the owners/managers of these defunct finance houses are to blame. They have increased the unemployment rate. We wouldn’t have been here if they both had played their roles well. Business owners must learn to be responsible. They start businesses, divert depositors’ cash and expect the business to continue operating.
Kuks
Answer
It is noteworthy that 21 firms out of the total number who had their licences revoked had effectively shut down. For some of the rest, some staff had not been paid their salaries for months. While we note that this enforcement action has precipitated some job losses, it very well would have been a question of time for
those firms to implode.
Q3. Bernard, ask SEC why they renewed the license of FirstBanc on 14th October, 2019 only to revoke their licence in less than a month?
Kwabena – Asylum Down
Answer
The SEC works with directors through a process to ensure that regulatory breaches are resolved and during that period, all other processes including licence renewals continue as normal until it is determined that a company is no longer fit to operate within the market.
Surveillance of licencees is a continuous process and we will continue to work to ensure that the integrity of the market is protected.
Q4. Ben, please ask the SEC boss the amount of pending liabilities to customers and how the government intends to pay customers vis a vis government’s own fiscal consolidation.
Kwaku, Dansoman
Answer
The estimated Assets under management of these 53 firms estimated at GHS 8 billion. It is noteworthy that not all that money is at risk. For instance, an estimated GHS2.4 billion is in Government of Ghana Bills, Banks and listed equities.
Government in an attempt to provide some relief to investors has committed to paying a capped amount to affected investors. The official liquidator, once appointed, will follow due to the process to realize assets and\ settle obligations to all creditors.
Q5. Good evening Bernard, I think the government is only interested in making its books look
good to them but not focusing on the country as a whole. They are being too hard on the local
institutions and making the foreign ones gain higher grounds. It’s soo unfair.
Evans Ziczorro Quaye, Oyarifa
Answer
This exercise has become necessary to ensure the market is rid companies that pose a threat to investments and the capital market as a whole. It is not intended to make foreign institutions stronger. Indeed, the funds management space is dominated by local companies. This will help build investor confidence and strengthen the capital market and positively impact the Ghanaian economy.
Q6. Bernard, Pls ask your guest if SEC’s activities is regular monitoring, how come they sat and put about 50 different companies together. Couldn’t they have done it case by
case after each inspection.
Kosh Danso, Burma Camp
Answer
The press release includes a section that provides details for each of the 53 firms. Efforts by the SEC to get directors of the affected firms to resolve regulatory breaches identified over the period have not yielded positive results. This exercise has become necessary to ensure that market operators with the potential to cause distress to the investing public are removed from the industry.
Q7. These banking sector crises is like a cancer cell. It start very small, and the victim will say”oh this is nothing” Then, the cell will spread and the victim will be shy to send it to the hospital. Therefore the cancer spread more. Then later to the extent of cutting the affected part of the victim.
Some people started these things but could not act and also alert the general public therefore they
decided to keep it within themselves. It has now come to the act of collapsing them, and find
means of helping the client. But it is a matter of time
Answer
No Comment.
Q8. Benard ask Rev. how often does his team do office visits and monitoring of the various institutions they regulate.
Ofori, Pantang
Answer
There is an annual schedule that is followed by the SEC surveillance team. Under the risk-based approach, this will vary for different companies.
Q9. Please, can Rev. Dr. Ogbarmey Tetteh tell us why they sat down for over 14 months to finally revoke Gold Coast’s licence whilst they were playing ‘hide and seek’ with people’s investments? Also will Dr. Nduom be prosecuted for mismanaging our portfolios?
Kwame, Asante Mampong
Answer
Revocation is not the first line of action and such decisions are only taken after a series of engagements and directives. The Commission engaged with Gold Coast towards resolving their liquidity issues but their efforts didn’t yield any results leading to the decision to revoke their licence.
The SEC will ban directors whose actions and inactions led to the revocation, from operating in the Capital Market for 5 years. In cases of alleged criminal behaviour the SEC will forward evidence to the Attorney-General for further investigation and prosecution
Q10. Good evening Bernard please ask Rev when is the cleaning up of the rural banks coming and is it true that 90% has the acquired the minimum capital.
NBA, Kintampo
Answer
Rural banks are not regulated by the SEC.
Q11. Why did SEC wait until GCFM paid friends and close associates their full investment only to now come and be talking about capping amount?
Forster
Answer:
Same answer as given to question 9.
Q12. Kindly ask Rev. for me, which institution manages our bonds and the treasury bills?
Kojo Amoah, Agona Asafo
Answer
Investors participate in corporate bond offerings through an SEC licensed broker. Act 929 authorizes the Commission to approve all corporate and municipal bond offerings. Treasury bills can typically be purchased from commercial banks.
Q13. Bernard pls ask your guest what are the strategies they put in place to ensure customers get
their investments before revoking licenses. Or they don’t care about that.
Kosh Danso, Burma Camp
Answer
Investors will be required to present all supporting documents of claims at designated locations to be communicated by the Registrar-General for validation and payment after realization of assets.
Q14. Bernard. I have a relative who lives outside the country but has her money locked up. What can be done for her during this exercise?
Albert- Effia,Takoradi
Answer
Any designated person with a notarized Power of Attorney will be able to file claims on behalf of an affected investor. Further information will be provided for peculiar instances by the Agent appointed by SEC to handle the validation of claims.
Q15. Ben, I am Daniel from Takoradi. Please ask SEC if CDH is part of those companies who’s license have been revoked. Thank you
Answer
Yes. They changed their name to Intermarket Asset Management.
Q16. Bernard ask Rev. Will he agree if we say his monitoring team must take responsibility of
the mess and also be prosecuted?
Fiifi Whyte Davies, DANSOMAN
Answer
Our current investigations point to lack of resources, the manual reporting system and the lack of enforcement as the contributing factors to the crisis. However, if the evidence is provided on the culpability on any SEC employee, we will not hesitate to apply sanctions which may include termination of appointment and referral for criminal prosecution.
Q17. Please ask Rev. That apart from giving the fund managers some time to sort themselves out , what did they do administratively as regulators to either assist administratively or financially to change the fortunes of the sinking institutions. Couldn’t they even take up as partners or be shareholders? Hmmmmmm. Are they killers or blow men. JOCEF, Dome.
Answer
Under its mandate as a regulator of the capital market, the SEC is not in a position to provide financial support for the operation of companies it regulates neither can it hold shares in any of its regulated entities.
Q18. Bernard, ask Rev. Dr. Daniel Ogbamey Tetteh, why not bailing out these companies rather collapsing them, today world giant companies like GMC, Coca Cola limited, Apple’s company limited were once bailed out, even between 2004 to 2009, the United States spent over five hundred billion dollars to bail out companies, collapsing our local institutions is not good.
Mustafa, Osiekuse Lower Manya Krobo
Answer
Under its mandate as a regulator of the capital market, the SEC is not in a position to provide financial support for the operation of companies it regulates neither can it hold shares in any of its regulated entities.
Q19. Please, what is the essence of the validation? Does it mean that the SEC does not have data
on deposits?
The validation process is necessary to corroborate the information available. Investors who do not have their documents must still submit a claim with a valid ID.
Q20. Bernard, please ask Mr Ogbarmey, when are they going start paying the customers, because some institutions including some banks have their investment locked up at some of these collapsed firms like UNISECURITIES GH. LTD and also are those (institutions/customers) likely to get their full money invested back or at what percentage can be paid?
Teifio aka Oladey, Prampram
Answer
Once the official liquidator is appointed, a time table for the process will be communicated to investors. Payment to investors will be upon realization of assets by the liquidator, however, government has committed to a capped amount to provide immediate relief for investors.