The Deputy Director-General of the Securities and Exchange Commission, SEC, Paul Ababio, says investors of the collapsed fund management companies would soon have access to their funds when their claims are successfully validated.
This follows renewed concerns over the silence of the capital market regulator which revoked the licenses of some 53 fund management companies last year for various regulatory breaches.
In an interview with Citi Business News, Mr. Ababio assured that a process to validate the claims submitted by investors is ongoing and when completed, payments will commence.
“We received claims; we gave up to January. What we have to go through now is the validation process. Along with that is also ascertaining the value of the claims to ensure that the claims that are reflected in the firms’ books are as we have received as well. And coming out of that, we are also in touch with the government obviously about the allocation of resources to ensure that the right sums are available, obviously to pay.”
“We want to assure the people that the processes are moving forward, obviously because we are in a capital market, we have to go through a liquidation process for these firms, so that process is also moving forward as we speak, and I think that is key for people to bear in mind.”
“There are series of processes we are going through and we will make announcements in the next few weeks on the full update, in terms of payments and timing of such payments when it is ready,” Mr. Ababio stated.
Aggrieved customers
Earlier this month, members of the Coalition of Aggrieved Customers of the defunct 53 Fund Management Companies called on the government to commence payment of their locked up funds before March 24, 2020.
According to the group, the government has sidelined customers of the collapsed fund management companies in the payment of depositors monies following the financial sector clean-up.
Addressing the media in Accra, Public Relations Officer of the Coalition of the Aggrieved Customers of the 53 fund management companies, Charles Nyame, said the group will embark on a demonstration if the government fails to pay their locked up investments.
The Securities and Exchange Commission (SEC) last year revoked the licenses of 53 fund management companies for several regulatory breaches.
The companies were said to have more than eight billion cedis in assets under management. The collapse of the companies came at a time a number of the firms were unable to meet investors’ demands for the funds.
An analysis of the country’s financial sector showed that some of the collapsed fund management companies had their funds locked up in savings and loans companies and other financial institutions that were shut down by the central bank.
Receivership process
Meanwhile, Kisseih Antonio, a Governing Council Member of the Ghana Securities Industry Association, the umbrella body of organisations licensed by the Securities and Exchange Commission, has told Citi Business News that restoring full confidence in the financial sector requires that investors in the fund management space are also allowed to have access to their funds in cash rather than in bond payments as has been planned by the receiver.
“We want to plead with the government to treat SEC-regulated institutions like the banks. We see that with the banks, we had depositors being paid in full, but with fund managers, we see that there is a cap, and investors are being paid with paper in any amount in excess of GHS170,000. If the government is to treat us like the banks that will go a long way in restoring confidence in the financial sector,” he stated,
Mr. Antonio called on fund management companies that have received some form of payments from the receiver to take steps to payout investors’ locked up funds.