The Securities and Exchange Commission (SEC) has begun making payment to clients of revoked fund management companies under the partial bailout package which aims at bringing some relief to them as the companies continue to go through a prolonged validation and liquidation process due to some court cases.
A press release by the SEC dated November 25, 2020 indicates a large number of affected clients have been sent SMS which states the value of their validated claims with outstanding customers to be covered shortly.
Clients who are interested in the partial bailout package must go through three basic steps namely: accepting the offer – where clients use what is called the Claim ID sent via the SMS to accept the package on the bailout website given them. The next step is the onboarding or Know Your Customer (KYC) where the claimant uploads specific documents required for the processing of the cash. Then, the third step is the cash collections stage at a GCB Bank branch, taking along copies of the documents uploaded in step two.
SEC is, therefore, appealing to all affected clients who have opted for the partial bailout package to patiently follow through with all the processes and rely only on information provided by the commission on the process. Clients who are yet to receive their Claim IDs are also advised not to panic as the SMS is being dispatched in batches.
The bailout package, B&FT’s sources at the commission has revealed, is GH¢1.4 billion from an estimated amount of GH¢7.4 billion. This package is primarily for clients of some 27 collapsed fund management companies, including Gold Coast Ltd, who, hitherto, had not received a penny from the liquidator due to prolonged validation processes resulting from court cases.
These clients, according to an earlier press release by the commission, will receive up to GH¢50,000 of their validated claims under this bailout arrangement.
This means that all 92,460 affected customers under this special offer will receive claims no more than GH¢50,000, even if their deposits exceed that. Such customers, according to the commission, will be settled after the liquidation proceedings in court, in line with the terms being applied under the bailout package for the clients of the Fund Management Companies currently under official liquidation.
On the other hand, all customers whose deposits with these fund management companies are below the said amount will receive full payment of the claims. Of the total number of affected customers of the 27 fund management companies under this arrangement, Gold Coast Ltd (now Blackshield Fund Management Company Limited) customers consist 92 percent.
The decision, SEC said, was borne out of compassion and government’s commitment to protect its citizenry and its sensitivity to the plight of affected clients compounded by the disruptive impact of the COVID-19 pandemic, especially, at a time it appears the validation will take a much longer time than expected due to the liquidation petition in court and other matters.
It must be recalled that an estimated GH¢8 billion is said to be locked up in the 53 fund management companies which had their licences revoked by the Securities and Exchange Commission (SEC) in November 2019.
Out of the 53 collapsed companies, 20 of them, as of November 16, 2020, have successfully been liquidated by the official liquidator – the Registrar General’s Department. Government through GCB Capital Ltd, has paid over 2,220 of the claimants some GH¢263 million.
The total claims signed-up by the over 4,154 clients of the 20 liquidated companies are valued at GH¢737 million, indicating more than half of the claimants have been settled under this bailout scheme.