First batch of investors of liquidated Fund Managers to get paid on September 23

First batch of investors of liquidated Fund Managers to get paid on September 23

First batch of investors of liquidated Fund Managers to get paid on September 23

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

Withdrawal from the fund [mutual fund] will however commence on 30th 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.