The Securities and Exchange Commission on Monday, 11th November 2019, together with its authorized agent revoked the licenses of fifty three (53) fund management institutions in the securities market for stipulated reason. The basis for the revocation of licenses of these financial institutions was premised on their failure to return clients fund which remained locked up, which defies investment regulations.
In an interview, the Director General of Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh gave an update on the validation exercise and the progress made on retrieval of the funds as he addressed the complaints of investors who haven’t yet received their money from the defunct financial institutions.
“In view of the fact that the Securities industry Acts doesn’t give the commission the powers to appoint a receiver, the first step after the revocation was to notify the official liquidator, that’s the Registrar-General about the revocation of the licenses so that he would go to court to request for the liquidation to be granted, that’s the first thing that we did”.
Aggrieved customers have been quite vociferous with their demands by protesting for repayment and have called for liquidation of these companies in order for their monies to be paid. The SEC boss said the commission has about 29 branches of CBG as the venues for the affected investors to file their claims and it is currently ongoing.
In reacting to the complaints of these affected individual, Rev. Tetteh said,
“We also created a help desk to handle calls and complaints from affected investors…then we put out a notice inviting the affected investors to file their claims…we gave a period of about two months starting from the 18th November 2019 till January but even after that clear deadline, the agent that we appointed is still receiving the filing of complaints”.
He further explained that when claims are made, the next step is the validation which at this point they establish whether the claims received are correct before the next step is initiated. The process has taken some time and according to him is due to the pandemic which has affected various levels of productivity.
According to him, the validation of claims is quite crucial because during their assessment of received claims there were some disparities which needed deliberate attention. He said,
“When we revoked the licenses, the assets of the management of the firms on our records was a little over 8 billion, now when the claims were filed, the value of the claims came to 12.6 billion, so clearly there is a gap”.
As part of the process an agent had to be deployed to the various companies to take “system balances” as the first stage of validation will involve the matching of claims to the system balances-which are the records of the clients. Manual validation becomes another alternative where they resort to the use of document for validation when there are some discrepancies between the claim and system balances. “If after that stage there’s still a disparity then you’d have to invite the claimant to come, probably they may have some information that can help in the process”.
Essentially, the effectiveness of the validation process will determine government’s allocation of resources to the affected parties, and the validated claims will give government an assurance of the veracity of claims.
The SEC boss further stated that,
“In the 2020 budget, the government made a commitment of 1.5 billion towards the industry in terms of the resolution of the challenges and if you look at the numbers in terms of the validated amounts it’s clearly multiples of that and that’s one of the things we have been doing, engaging government on the level of support that they would provide”.
Mr. Tetteh admitted there are issues with understanding of the processes and further advised the investors to exercise patience as their monies will be retrieved, even as they liaise with PWC, their agent. He said,
“When the claims are filed, the agent would provide the text message acknowledging receipt of the claim. We have received some complaints that some of the investors have not received acknowledgement of the claims they filed and I want to say that if you filed your claim and for one reason or the other you haven’t received acknowledgement of the claim you filed please send in your complaint and we will notify the agent”.