The Securities and Exchange Commission (SEC) has announced the release of GH¢1 billion to provide financial relief to investors affected by the revocation of fund management licenses in November 2019.
This move is part of a broader bailout program initiated by the government through the Ministry of Finance, which aims to support individuals whose investments were lost in the collapsed fund management companies.
According to a statement issued by SEC this week, the first tranche of the GH¢1.5 billion bailout package, valued at GH¢700 million, was made available in August 2024. The remaining funds GH¢400 million each are scheduled for disbursement in October and December 2024.
The statement further indicated that “The government is committed to ensuring that the affected investors receive the necessary support. This bailout will not only provide financial relief but also help restore confidence in the securities market.”
This recent release adds to the GH¢4.46 billion that has already been disbursed to settle 84,202 investor claims from defunct fund management companies. The SEC noted that approximately 82% of these claims have been fully settled, with 69,445 investors receiving their full payment.
“This decision, driven by humanitarian considerations, seeks to provide further relief to investors who have been waiting for a resolution since 2019,” the SEC statement read. The bailout targets clients of companies such as Blackshield Capital Management Limited (formerly Gold Coast Fund Management Limited) and Kron Capital Limited, who have faced significant financial difficulties since the collapse of these firms.
Under this release, investors with examined claims will receive either GH¢50,000 or 15% of their outstanding claims, whichever is higher. This payment structure is expected to fully settle the claims of 91% of the affected investors.
The funds will be managed by the Amalgamated Mutual Fund (AM Fund), a special purpose vehicle managed by GCB Capital Ltd.
In the coming days, AM Fund managers are expected to meet with investors to outline the procedures for accessing the released funds. They will also provide guidance on the option of leaving the claims in the AM Fund for further management.
The SEC reiterated its commitment to protecting investors and fostering transparency within the securities market.
“This bailout reflects the government’s dedication to addressing the impact of the 2019 fund management crisis and promoting stability in the financial sector,” the statement added.
