SEC settles GH¢1.7bn bill out GH¢8bn claims of aggrieved customers

Director General of the Securities and Exchange Commission, Reverend Daniel Ogbarmey Tetteh

The Securities and Exchange Commission (SEC) says it has settled more than 20 percent of the validated claims presented by customers of defunct fund management companies which had their licences revoked late 2019.

According to a latest update by the regulator, it has, as of March 31, 2021, made payments of GH¢1.7 billion out the GH¢8.3 billion validated claims to customers who have agreed to either a full or partial bailout settlement.

Out of the amount paid, GH¢994.5 million have gone to 52,264 customers under the partial bailout programme; and GH¢768.2 million was paid to 6,916 customers under the full bailout programme.

The full bailout programme is currently at its third phase. For the first phase, GH¢1.7 billion claims were submitted to the regulator by 20 fund management companies, of which GH¢1.1 billion was validated.

For the second phase, a total value of GH¢1.8 billion were submitted by 8 fund management companies but SEC was able to validate GH¢1 billion; and further validated another GH¢556 million for six companies in the third phase.

Commenting at a press conference organised by SEC in Accra last Friday, Director General of the company, Daniel Ogbarmey Tetteh, assured all customers who have signed on to the packages but have not yet received payment to remain calm, as the regulator will ensure all validated claims are fully paid, especially with the GH¢5.5 billion provided by government in the 2021 budget.

“The roll-out of the full and partial bailout packages has been quite successful as detailed above. The partial bailout authorized by the Government has resulted in about 66 percent of claimants (all categories) being fully paid.

For the claimants with validated claims in excess of the GH¢50,000 threshold, please be assured that the full bailout package would be triggered when the liquidation orders are granted. There is thus no need to resort to any middlemen or facilitators to secure payout of the bailout.

The SEC wishes to assure all affected clients that the government has made provision to cover all validated claims with the recent additional allocation in the 2021 National Budget Statement to support the clean-up exercise in the asset management industry. There is, hence, no need for any affected client to panic because of the protracted court liquidation process,” he said at the press briefing.

He, therefore, appealed to all affected clients to patiently follow through with all relevant processes to redeem their claims and rely only on information provided by the SEC and the Official Liquidator.


SEC in November 2019 withdrew the licences of 53 fund management companies following their failure to comply with the industry’s requirement and, in some cases, absconding with depositors’ funds. However, three of the companies have successfully fought back to have their licences restored, taking the new total to 50.

Among the breaches made by the companies are guaranteeing of returns contrary to the directive of the Commission; failure to honour client redemption requests; failure to honour payment terms agreed at Complaints Hearings; failure to place client funds with proper due diligence and the requisite standard of professional conduct, evidenced by over concentration of portfolios in high-risk institutions and related party transactions resulting in severe liquidity challenges.

Other offences include failure to segregate client funds from operational funds and in some cases using client funds to pay for operational activities; closure of offices without following due process; persistent regulatory breaches including failure to submit reports as required; corporate governance weakness with weak board oversight, poor accountability, and override of Investment guidelines; and failure to monitor and inject liquidity to comply with required levels.

According to the regulator, all efforts to get directors and management of the affected institutions to rectify the above lapses have yielded no positive results. Consequently, it adds, the liquidity challenges of these companies continue to deteriorate leading to twenty-one (21) of them closing their offices and absconding with clients’ funds without due process, whilst those currently operating have severe challenges in meeting clients’ requests for a return of their funds or investments.

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