*Over 50% of claims validated

*Modalities for payment out in the coming weeks

Claims filed by investors affected by the closure of investment firms have amounted to GH₵12.56 billion.
GH₵4.5bn higher than assets under management

This is about GH₵4.5 billion higher than the GH₵8.08 billion assets under management the firms had reported to the Securities & Exchange Commission (SEC) at the time of the revocation of licences.

GH₵5bn estimated to be at risk
Out of the GH₵8.08 billion assets under management declared by the collapsed firms, GH₵5 billion are estimated to be at risk while the remaining GH₵3 billion are considered as safe.

How to access the safe assets

However, access to the safe assets can only be made possible with the appointment of an official liquidator by the court.
90,000 Claims filed

The GH₵12.56 billion emanated from 90,000 claims filed by different economic actors, including individuals, corporates, social and other organisations, as well as financial institutions, among others, with PricewaterhouseCoopers (PwC), who were appointed by SEC as the agent to receive claims from affected investors.

Modalities for payment to be announced in the coming weeks
Speaking to selected editors in Accra, Director General of the Securities and Exchange Commission (SEC), Rev Daniel Ogbarmey Tetteh assured that validation was ongoing and the announcement on modalities for payments would be made in the coming weeks.

How much investors will receive
He revealed that SEC was in discussions with the Ministry of Finance, being mindful of the untold hardship of investors, exploring options on the nature of social intervention to offer investors.

GH₵1.5bn allocated in 2020 budget
An amount of GH₵1.5 billon was allocated in the 2020 budget to sort out investors, but Rev Tetteh said with the GH₵12.56 billion claims filed, discussions have been elevated considering various options.
Decision to pay capped amount will change

SEC initially announced that investors will be paid a capped amount, but Rev Tetteh said ongoing discussions suggest that decision may change to a more progressive one.

SEC has no power to appoint receiver
Explaining why the process seems to be taking a bit of time, he said SEC has no power under the Securities Industry Act, 2016 (Act 929) to appoint a receiver.

Registrar General to liquidate collapsed firms

Therefore, he said SEC had to notify the Registrar General, who has begun the court process for an order to be appointed as official liquidator to liquidate the collapsed firms.
COVID-19 slowed down validation
In addition, he said the coronavirus pandemic, which also brought about various restrictions, slowed down the validation process.

Filing of claims not same as validation
Rev Tetteh explained that filing of claims is not the same as validation, adding that even though the period to file claims has expired, investors who for various reasons could not file their claims can still do so.

Validation explained

He said validation involves matching the claims filed by each investor with the documented records of the affected companies.

How discrepancies are checked
He noted that when the claims filed correspond with the system balances, the claims are validated.
Why SEC invites investors and ex-employees

On the other hand, he said when inconsistency is identified, the manual records are examined to ascertain the correct amount, but if the discrepancy persists, the investor and ex-employees may be invited to assist in the validation.

Therefore, he said, not receiving acknowledgement via text message or not being invited by SEC does not amount to rejection of the claim.

Importance of validation

Rev Tetteh emphasised that the validation process was also critical to ensure that the right amount is paid to the right person.
Checking system balances
Since some of the firms folded up before SEC intervened, he said gaining access to the database of such companies to establish system balances was difficult.

Over 50% claims validated
He announced that PwC has completed validation on over 50% of claims filed, but could not provide the exact date the validation would be completed.

Fate of Mutual Fund investors
An update on the appointment of fund managers for 18 Collective Investment Schemes indicated that out of the 18 Collective Investment Schemes affected by the recent revocation of licence of some investment managers, 13 have notified SEC of the appointment of new fund managers.

This is made up of 11 Mutual Funds and 2 Unit Trusts.
One out of the remaining five is in the process of liquidation while four have written to SEC indicating that they are still in the process of appointing new fund managers

Credit: The Finder

(By Elvis DARKO)