Blackshield customers, others to get partial refund of funds

The government has taken a “compassionate” decision to partially bail out customers of the remaining defunct fund management companies (FMCs) whose firms are still undergoing liquidation processes.

The decision will allow the Securities and Exchange Commission (SEC) to facilitate the payment of up to GH¢50,000 to each customer whose money is locked up in the more than 20 FMCs.

The SEC said in a statement released yesterday that it would cover all companies whose licences were revoked but for whom legal processes to allow for formal payments of their funds had dragged.

It said the action was expected to benefit 92,460 claims filed against the remaining 27 FMCs.

“The decision to make this partial payment is predicated on the government’s commitment to protect its citizenry and its sensitivity to the plight of affected clients, compounded by the disruptive impact of the COVID-19 pandemic.

“Furthermore, this intervention has become necessary at this stage because liquidation petitions for the remaining affected FMCs are currently at different stages,” it said.

Compassionate act

The statement said the customers, including those of Blackshield, which has been affected by the litigation of its former fund management company, would benefit from this latest intervention.

“In addition, some affected FMCs, such as Gold Coast Fund Management Limited (now Blackshield Fund Management Company Limited), are contesting the liquidation petition and, as a result, have filed stay of proceedings until their application for judicial review of the decision of the Administrative Hearings Committee has been heard.

 “There is the possibility for these legal processes to take some time and, therefore, extend the pain and suffering of the affected investors, hence this decision by the government.

“This compassionate move by the government of a partial bailout will cover all clients of the failed FMCs whose licences were revoked but are yet to come under official liquidation, including customers of Blackshield,” it said.

Validated claims

Of the total number to benefit from the exercise, the statement said Blackshield accounted for 84,656 (92 per cent) claims.

 “Claims filed by individuals (including pensioners) are 86,506, with Gold Coast Fund Management (now Blackshield) accounting for 80,018 (92.5 per cent) of these claims.

“Based on the validated claims, the partial bailout being offered would result in 89 per cent and 82 per cent of affected individuals and pensioners being fully settled, respectively,” it said.

It indicated that the validated claims in excess of the partial payout amount would be covered after the liquidation proceedings in court, in line with the terms being applied under the bailout package for the clients of the FMCs currently under official liquidation.

Customers’ reaction

Reacting to this latest development, the Secretary of the Coalition of Aggrieved Gold Coast Customers, Mr Joseph Ayitey, commended the government for  listening to the plight of the group.

However, he indicated that the decision had delayed, claiming that majority of the customers had lost their lives, while many had also become bedridden.

“Currently, about 368 of our members have died and most of these deaths were as a result of health-related issues. I believe if this money had come earlier, most of them could have paid to access good health care and their death could have been prevented,” he indicated.

Mr Ayitey also said that the processes which customers had to follow to retrieve their money were cumbersome.

He explained that most of the customers were living in remote areas, and access to the Internet was a challenge in such areas.

 “The procedure is through an online process, so imagine a customer who lives in an area where Internet access is a challenge; it means he has to  travel to a different town where Internet is available to access the site, else he may end up losing his money,” he added.

Background

Although clearance was given and funds released for the payment of money to customers affected by the crisis, customers of Blackshield were exempted from receiving payment.

The SEC explained that those customers would not benefit from the first phase of the bailout package because the company was challenging the revocation of its licence in court.

However, the customers, who had come together to form a coalition, on several platforms called on the SEC and the government to reconsider that decision.

As recent as August 31, the coalition, at a press conference addressed by its Public Relations Officer, Mr Charles Nyame, said, among other things: “We hereby call on the government and the SEC to rethink their decision and include customers of Blackshield in the bailout package, since advancing a bailout will not amount to an interference in the court process between the regulator and Blackshield.”