The Registrar General will today commence engagements with another set of investors of defunct fund management firms. 

The creditor meetings will afford the Registrar General an opportunity to review the concerns of these investors.

In concluding these engagements, Jemima Oware said it will afford the department an opportunity to kick start another payment process for customers of the remaining eight fund management firms.

“From the 25th to the 26th of November, I [Jemima Oware] will be holding creditor meetings and class meetings. The first, 25th, I will be holding creditor meetings for all the eight companies [defunct fund management firms]. I will schedule it like I did the last time. We start from 8:30, we roll it on to the end of the day.”

“Every company will have a slot, then the next day I [Jemima Oware] will do one virtual class meeting for all the investors and after that they will be able to join us for the bailout packages that government is offering through GCB capital. As long as you have the court order winding up, we will carry on with the process”, she pointed out.

Furthermore, Mrs Oware said “it’s unfortunate that they [eight recalcitrant fund management firms] are doing that because if you are able and capable of paying your investors then go ahead and pay them and that it won’t come before me. But the key thing is they are not able to pay their debt as it falls due, so that is why we are in court and you are supposed to pay your debt when it falls due”

The virtual investor meeting will bring together the number of liquidated fund management firms that the Registrar General has worked on to 28, out of the of 47 firms.

One of the firms that the Registrar Department will be engaging is Uni- Securities.

PwC issues ID numbers to customers of defunct fund management firms

Meanwhile, Joy Business is learning that accounting and auditing firm, PwC and Register General have started issuing ID numbers to some customers of defunct fund management firms.

These are customers that are expected to benefit from the government bailout programme. 

Last week, the Securities and Exchange Commission announced that it has secured some GH¢1.4 billion from government for onward disbursement to the investors of defunct fund management firms that their liquidations are being contested by their shareholders in court.

The payment is expected to cover clients of Black Shield Fund Limited.

The first batch of locked-up investments funds in cash will be paid to the depositors [investors] on 23^rd September of this month, according to the Official Liquidator, the Registrar General.

Withdrawal from the fund [mutual fund] will however commence on 30^th September, 2020.

The fund will have a short term (Tier 1) component which will allow the investors [depositors] to retrieve a portion of their claims immediately in cash and the remaining in a medium term (Tier 2) component [a mutual fund] that shall have time based withdrawal restrictions.

The Registrar General communicated the information to investors and creditors who participated in the virtual meeting today, covering investors of the 20 Fund Management firms that have been cleared by the court for their liquidation.

The package is being offered to all claimants of the 20 Fund Management Firms whose liquidation orders have been received and who signed up for the programme on the rolling basis.

The validated investors will receive pro-rata shares of their validated amounts into the two tiers [Tier 1 and Tier 2] of Amalgamated Fund Limited.

However, investors in firms that are presently not part of this scheme will be invited to join when the liquidation orders are obtained for their firms.

Bailout structure

The bailout package is being offered to investors of the Fund Management Companies via a Special Purpose Vehicle (SPV) that shall be a mutual fund.

The SPV shall be managed by GCB Capital, the investment banking arm of GCB Bank.

Investors (claimants) who choose to participate in the Bailout Programme shall exchange their interest in the defunct Fund Management Companies for shares in the SPV. Allocations will be in validated claims.

However, claimants who do not subscribe to the bailout scheme will have to wait for a proportional liquidation dividend from the Official Liquidator.

The intervention by the government and the SEC is to restore confidence in Ghana’s capital market, whilst ensuring that beneficiaries of the government bailout in the capital market receives same treatment as beneficiaries of the government bailout in the banking sector.  

How to subscribe?

Each claim by an investor is assigned a CLAIM ID which will be communicated by SMS.

This claim is unique to each investor claim.

How did we get here?

The Securities and Exchange Commission in November last year revoked the licenses of 53 fund management firms for not operating in conformity with the industry’s best practices and standards, among others.

Prior to that, some fund management firms were finding it difficult to settle their investors claims because of liquidity challenges.

The SEC began discussions with the government to find an appropriate bailout programme for the investors whose funds were locked-up.

The Registrar General was subsequently appointed as the Official Liquidator of the defunct Fund Management Funds.

Later on, some of the liquidated firms sought to challenge the process established by the SEC.