Include Gold Coast Fund Management in bailout package

A 70-year-old Wilson Antwi, one of the customers of the defunct Gold Coast Fund Management (GCFM) has appealed to the Government to include customers of the company in its (Government’s) bailout package.

The wheelchair-bound former Mechanical Engineer told the Ghana News Agency that he lost his wife because he could not access his funds to save her life and prayed the Government to have compassion on the customers and lessen the economic hardship arising out of the banking sector clean-up and COVID-19.

He made the appeal on the sidelines of a press conference by the Coalition of Aggrieved Customers of the collapsed Fund Management Companies to register its unhappiness over the Securities and Exchange Commission’s (SEC) alleged decision to “sideline” the customers of the Gold Coast Fund Management of government’s bailout package.

The conference was in response to SEC’s press release on the update on Validation, Liquidation Orders, Government’s Bailout of Clients of FMCs, and the ongoing court cases against the Revocation of Licence.

The frail-looking old man, who is struggling with a mild stroke, said he and other customers invested their gratuity in the companies and pleaded with Government to ‘save their souls’.

Mr Charles Nyame, the Public Relations Officer of the Coalition said it was “unthinkable for the customers of this particular company (GCFM) and other 24 companies to be sidelined in government bailout package especially when we form the majority (82 per cent) base on unjustifiable reasons by SEC.”

He said assertions by SEC that the Management of the Gold Coast Fund Management (GCFM) failed to grant the Commission access to their customer database and records to enable them to undertake validation of customers’ claims as filed was not true.

Mr Nyame said the Management of Gold Coast Fund had issued a rejoinder to that effect, indicating that “SEC has had full access to the client’s information at least on three different occasions between 2019 till date.”

He said he did not understand why SEC claimed it had secured the bailout but “sidelining” customers of GCFM on the same reasons for, which the bailout was secured.

Mr Nyame called on Government to reconsider its decision and include GCFM customers in the bailout package, arguing that advancing the bailout package to GCFM customers did not amount to interference in the court process between the regulator and GCFM.

SEC in a press statement said four of the 50 Fund Management Companies, (FMCs) whose licences were revoked had filed applications in Court to challenge its decision to revoke their licences.

It said the cases were at various stages in the law court and had resulted in a situation, where no other action could be taken by the SEC or the Registrar General to proceed with official liquidation and the Government bailout of the clients of the four FMCs until the Court decided on them.

The statement said Blackshield Capital Management Limited (Formerly the Gold Coast Fund Management) appealed to SEC’s Administrative Hearings Committee (AHC) and was unsuccessful in its appeal.

It said subsequently, Blackshield Capital Management Limited had filed a case in court seeking a review of the AHC decision.

“Hearing of this case commenced on 28th July 2020 and would resume after the legal vacation,” it added.

It said Firstbanc Financial Services Limited also filed an application in Court for Judicial Review of the revocation of their licence and judgment was given in favour of the SEC.

The statement said Firstbanc Financial Services Limited had commenced processes for an appeal in the Court of Appeal against the decision and on August 10, 2020, Firstbanc Financial Services Limited filed an application in Court for an injunction pending the determination of the appeal.

It said Apex Capital Partners also filed an application in Court for Judicial Review of the revocation of its licence and judgment was given in favour of the SEC.

“Apex Capital Partners appealed against the decision in the Court of Appeal on July 8, 2020,” it added.

It said Ideal Capital Partners Limited, after withdrawing an initial court case, filed another case on July 29, 2020, against the SEC’s revocation decision.

Hearing of the application by the Court is scheduled to begin on 18th November, 2020.

SEC, acting per Section 122 (2) (b) of the Securities Industry Act 2016, (Act 929) (SIA) revoked the licenses of 53 FMCs on 8th November 2019, due to their inability to return clients’ funds totalling GHC 8 billion, and significant breaches of applicable rules that created risks to financial stability.

The enforcement action taken by SEC forms part of a general exercise to clean-up the financial sector.