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Business News of Sunday, 30 August 2020


SEC to announce bailout package for clients of failed FMCs

Rev Daniel Ogbarmey Tetteh, Director-General, SEC Rev Daniel Ogbarmey Tetteh, Director-General, SEC

The Securities and Exchange Commission (SEC) has revealed that the government will soon announce a bailout package for clients of the 53 defunct Fund Management Companies (FMCs).

“Prior to the Official Liquidator realising value from assets, the Government, mindful of the plight of Investors, has reiterated its commitment to a bailout package for clients of the FMCs in the form of a social intervention similar to what was done for depositors of the failed SDIs and MFIs,” a statement on Saturday said.

“The first phase will cover clients of the twenty-two (22) companies currently under official liquidation per Court orders, based on their validated claims. The Official Liquidator will communicate details of the payment process to affected clients starting in September. The second phase would cover clients of the remaining companies after the liquidation orders are secured,” the statement noted.

Below is the SEC’s full statement:

The Securities and Exchange Commission (SEC), acting in accordance with Section 122 (2) (b) of the Securities Industry Act 2016, (Act 929) (SIA) revoked the licenses of fifty-three (53) Fund Management Companies (FMCs) on 8th November 2019, due to their inability to return clients’ funds totaling GHC 8 billion, and significant breaches of applicable rules that created risks to financial stability. The enforcement action taken by the SEC forms part of a general exercise to clean-up the financial sector.

Following the revocation of the licences, the SEC took the following actions to protect investors:

1. Notified the Registrar of Companies/Registrar General to petition the Court for orders to commence the official liquidation of the fifty-three (53) FMCs under the relevant law.

2. Appointed an agent in line with the relevant provisions of the SIA, to take copies of records and lock up premises to secure assets of the affected companies.

3. Mandated the agent to receive claims from the clients of the affected companies and acknowledge receipt of same.

4. Mandated the agent to conduct validation of claims received from affected clients.

5. Engaged the Government through the Ministry of Finance on a bailout package for affected clients of the FMCs.

Eight (8) of the firms whose licences were revoked appealed against the revocation decision to the Administrative Hearings Committee (AHC) but only three (3) were successful. The engagement with Government was against the background that the liquidation process (securing the Court orders and realising assets) has the tendency to be long and protracted; meanwhile, providing early relief to affected investors was also important. It was agreed that rolling out of the bailout package promised by Government would proceed after claims are validated and liquidation orders secured. We provide an update on these activities below.


Out of the fifty (50) companies whose licences remain revoked, three (3) did not have any claims filed against them, leaving forty-seven (47) companies against whom claims were filed by affected clients. As of 26th August 2020, a total of 98,820 claims valued at GHS10.83 billion have been received. The Commission has full access to the records of forty (40) of these companies, partial access to one (1) company, and no access to the remaining six (6) companies.

Validation of the claims filed by the clients of the forty (40) companies where we have full access to their records has been completed.