The Coalition of Aggrieved Customers of Collapsed Fund Management Companies is calling on the Securities and Exchange Commission to ensure that any company whose license is restored, is liquid enough to pay clients back their locked-up investments.
This follows an announcement by the Chief Executive Officer of the Securities and Exchange Commission, Rev. Daniel Ogbamey Tetteh, that his outfit will soon restore the licenses of some fund management companies that were revoked in November 2019.
Speaking to Citi Business News, Secretary to the Coalition, Joseph Aryeetey, said clients cannot wait any longer to access their funds when such companies are reinstated.
“What they should establish is that these companies they are returning their licenses to should be liquid enough to return our monies to us at any critical time that we need them. The reverse of the licenses should also not be an albatross on our necks for us to now go through another five years looking for our money. They came out to say they have revoked their licenses. Also, for the past 2 years that our monies have been locked up, what has been happening with our monies. The monies have just lost value. So, they should make sure that these companies are liquid enough so that we can get our money,” he said.
Earlier this year, the Coalition called on government to release funds to pay its members.
According to them, the lock-down in Accra, Tema and Kumasi, in the wake of the novel Coronavirus in the country, worsened the living conditions of pensioners and the vulnerable whose funds have been locked-up with the 53 collapsed fund management companies.
They also said the government had sidelined them in the payment of depositors monies following the financial sector clean-up.
Background
The Securities and Exchange Commission (SEC) in November 2019 revoked the licenses of 53 Fund Management Companies.
SEC explained that the revocation follows the companies’ failure to “return client funds which remain locked up and in a number of cases, have even folded up their operations.”
The action was taken pursuant to Section 122 (2) (b) of the Securities Industry Act, 2019 (Act 929) which authorizes SEC to revoke the license of a market operator under some circumstances.
The companies who lost their licenses were said to be managing a customer base of about 56,000 clients whose funds run in excess of GH¢8 billion.
Later, SEC selected branches of Consolidated Bank Ghana Limited (CBG) to receive claims from the clients who have their funds locked up at the affected companies.
The banks were tasked to accept relevant documents for the validation of the investment claims.
According to SEC, the said branches serving as agents were authorized “to ascertain and validate details of investors and their investments with these institutions at the time of the revocation to facilitate the administration of the Government payout of a capped amount to affected investors.”
