Less than a week after the official liquidator of the 53 fund management companies, Jemima Oware – who is the Registrar General – announced the commencement of payments to their investors, about GH¢7.77 million has already been paid to some 200 investors, who had tjheir monies locked in 20 fund management firms that have been cleared by the court for their liquidation.

The refunds are being handled by GCB Capital, a subsidiary of GCB Bank.

Explained the managing director of GCB Capital, Kofi K. El-Awuku, : “ The lients of the 20 firms for whom liquidation orders have been gazette were invited to voluntarily sign on to the programme and the number we got at our last check was 2,852. Out of thewse, the total number that have actually had their redemption requests processed since the redemption window opened on Wedneday, (last week) is about 200.”

The bailout is being executed through a special purpose vehicle established specifically for that purpose, called Amalgamated Mutual Fund PLC, which paves the way for payment of claims amounting to GHc563.65 million in all.

The fund has two components. Tier one is for clients who have finished their onboarding process and who are currently able to redeem shares for cash within 48 hours. The tier two however is long term in nature with withdrawal restrictions.

This structure is enabling government to manage its cash flows. Indeed, the use of a special purpose vehicle is seen as strategy to enable government separate its obligations from its fiscal accounts in a manner similar to the ploy used to recapitalize five indigenous banks last year using the Ghana Amalgamated Trust )GAT) as the special purpose vehicle deployed.

In this case the SPV has been able to create a mutual fund and has thus obtained financing by leveraging on the underlying assets of the fund managers that have been liquidated.

However there are still worries that restrictions on the bail out amounts will create a furore, especially as the impending general elections draws near, putting pressure on government to please everyone involved so as not to suffer “protest votes.” For instance financial institutions and credit unions can only get 50 percent of their investments for now.

However government is getting sympathy based on the argument that the bailout is simply state generosity as investments in managed funds are risk assets with no guarantee of redemption.