Debt situation: staff of fund managers subject to abuse

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An unintended consequence of the downward spiral in the domestic financial market has been verbal abuse and sustained threats

An unintended consequence of the downward spiral in the domestic financial market has been verbal abuse and sustained threats of physical attacks on agents of institutions operating in the space, particularly fund management entities.

With prices of debt instruments falling, the Securities and Exchange Commission (SEC) issued a directive for fund managers to adopt the mark-to-market valuation approach for their portfolios – with the aim of ensuring “a fair and transparent playing field so that both investors and operators are protected”. This has resulted in some losses for customers seeking to liquidate their investments at current market prices.

Furthermore, activity on the secondary market ground to a standstill following announcement of the domestic debt exchange programme; as such, fund managers are unable to meet redemption requests.



With consumers still agitated over losses from the financial sector clean-up, some have resorted to menacing behaviour. In a note to stakeholders on its decision for its staff to work remotely for an extended period – from December 22, 2022 until January 10, 2023 – leading investment house Databank said it has to ensure the well-being of its staff.

“Many of our clients have tried to be patient with us as we wait for government to provide liquidity. For this we are extremely grateful. However, there are several clients who have felt the need to abuse our staff physically and verbally – and also threaten their lives as well as their families. As such, we have no choice but to move to a work-from-home option,” the statement read in part.

“While our offices will be physically closed, we will continue to serve you and process transactions remotely; and all our digital channels will remain open just as we did during Covid. However, we cannot endanger the lives of staff by opening the office without any available liquidity,” it added.

When the B&FT contacted Databank Group Chief Marketing Officer Gillian Hammah, she said while no incident of actual bodily harm had been recorded, the work-from-home policy is the most prudent action to take until there is more clarity on the state of affairs. “In all fairness to investors, they have obligations to meet and commitments they have made with their money, so we cannot blame them entirely; but we do not want to compound the situation by waiting for there to be actual physical harm.

“There have been threats to our staff, and what we are not prepared to do is wait for somebody to actually injure one of them before we act and say we are now going to take precautionary measures. I do not think we would be able to justify to any staff member’s family that threats have been coming and we just sat down. I cannot imagine anyone that it would sit well with,” she elaborated – adding that the experience gained during the pandemic’s peak ensures staff will be able to deliver while operating remotely.

The reason for Databank’s cautionary posture was corroborated by a manager at another investment house, who spoke anonymously as he had not been cleared to speak on the subject as at the time of going to press.

He said despite best efforts to explain market developments to clients, scars from recent events have increased investor agitation. “We have had a number of intimidating calls – and even an incident on our premises as customers treat us with suspicion, suggesting that we had not been entirely honest with our dealings; but nothing could be further from the truth. However, we understand them and have been calm. We expect that things will ease-up in the New Year,” he stated.

A proposed town hall meeting slated for Monday, December 14, 2022, spearheaded by the SEC together with the Ghana Securities Industry Association (GSIA) to “discuss recent market developments”, was postponed indefinitely amid stakeholder negotiations around the debt exchange programme.

Following a pushback by various stakeholders, the Finance Ministry announced an extension of the deadline for the voluntary programme from Monday 19 December 2022 to Friday 30 December 2022 with a tentative Settlement Date of Friday 6 January 2023 – “or as soon as practicable thereafter, but no later than the Longstop Date which is now scheduled for Monday 13 January 2023, unless further extended by the Republic pursuant to the Invitation”.

The programme’s result is now expected to occur “on or about 2 January 2023” the Finance Ministry said, with other terms and conditions of the programme remaining the same.

Databank confirmed that it is still engaging financial sector authorities and is optimistic about liquidity support from the measures outlined by the Financial Stability Councils, including the proposed Ghana Financial Stability Fund (GFSF) “as a last resort”.

Considering the erosion of investor confidence in the financial sector, Dean of the University of Cape Coast (UCC) Business School, Professor John Gatsi, believes further clarity must be provided on modalities of the GH¢15billion Fund, which will be open to entities that participate fully in the exchange programme.

“First of all, the amount in question is quite ambitious seeing that it will be almost 75 percent of the estimated GH¢21billion, at least from official sources, that was spent on the entire financial sector clean-up. But we also need to know how much the various parties will be contributing and to hear from the proposed development partners how much they are willing to support and what conditions are to be expected,” he said.

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