The Akufo-Addo has suddenly decided to pay up customers of fund management companies that the government contentiously closed down in the 2018 financial sector clean-up.
The surprise announcement emerged from the Securities and Exchanges Commission (SEC) today, 18th November 2020, which said the decision is a “compassionate” one.
Customers will receive up to Ghc50,000 of their locked up monies, the announcement said.
“The Commission hereby announces that Government has authorized a partial bailout which involves a partial payment of up to Fifty Thousand Ghana Cedis (GHS50,000) to all customers of the remaining affected Fund Management Companies while the court process on the liquidation petition and other matters continue,” SEC stated.
According to the announcement, the partial bailout would cover a total of 92,460 claims filed against the remaining 27 Fund Management Companies, out of which Blackshield Fund Management Company Limited accounts for a total of 84,656 (92%) claims.
Claims filed by individuals (including pensioners) is 86,506 with Gold Coast Fund Management Limited (now Blackshield Fund Management Company Limited) accounting for 80,018 (92.5%) of these claims. “Based on the validated claims, the partial bailout being offered would result in 89% and 82% of affected individuals and pensioners being fully settled respectively. Validated claims in excess of this partial,” read the SEC announcement.
The capital market regulator said the decision to make this partial payment is predicated on Government’s commitment to protecting its citizenry and its sensitivity to the plight of affected clients compounded by the disruptive impact of the Covid-19 pandemic.
“This compassionate move by Government of a partial bailout would cover all clients of the failed Fund Management Companies whose licenses were revoked but are yet to come under official liquidation including customers of Blackshield Fund Management Company Limited,” stated SEC.
However, critics are already spotting partisanship in the decision because it is a 360 degree change of position by the SEC, which had used all sorts of means to ward off demands by fund management companies, especially Black Shield, to have their customers included in a government package to pay customers of fund companies with locked up cash.
With just some three weeks to elections, the decision is being seen as another money-wasting move that characterises incumbent parties during elections.
Meanwhile, it is not too clear if this announcement is legally wholesome, given that some of the affected companies are in court contesting the government’s decision to revoke their operating license on grounds of insolvency even though the government owes some of these companies.
It would appear, that the decision is prejudicial and unfair to the companies as it means that even if the companies win the legal battles, their customers would have been paid away by the same Akufo-Addo government which plunged the companies in crises in the first place