The Securities and Exchange Commission (SEC) has pointed out that the Ministry of Finance cannot be blamed for the delay in payment of bailout funds to affected customers of Gold Coast Fund Management Limited.
According to the SEC, the delay in payment of bailout funds to the affected customers is not due to the refusal of the Ministry of Finance to provide funds.
It rather said in a statement that “The delay is principally due to the legal action by Blackshield/Gold Coast contesting the liquidation petition brought by the Official Liquidator (Office of the Registrar of Companies) at the request of SEC following the revocation of licences. The SEC will continue to support the Official Liquidator in pursuing the liquidation petition in court.”
The SEC response is coming due to picketing f clients of Blackshield/Gold Coast at the Ministry of Finance.
It may be recalled that the SEC revoked the licenses of fifty-three (53) Fund Management Companies (FMCs) on November 8, 2019 due to various regulatory breaches, including their inability to return clients’ funds estimated at ¢8 billion.
The licenses were revoked in accordance with the mandate of SEC to protect investors and the integrity of the capital market as well as mitigate the risks to financial stability.
Following the revocation of the licenses, the SEC took the following actions to protect investors.
They include notifying the Registrar of Companies/Registrar General to petition the Court for orders to commence the official liquidation of the 53 FMCs under the relevant law, securing a bailout package for affected clients of the FMCs from the government on two conditions that the liquidation orders are granted by the courts and appointment of an agent in line with the relevant provisions of the Securities Industry Act to take copies of records, lock premises to secure the assets of the affected companies and mandating the agent to receive as well as validate claims from the clients of the affected companies.
SEC confirmed that so far ¢4.6 billion has been paid to clients of fund management companies. They include ¢3.1 billion to Amalgamated Fund Tier 1 payments and ¢1.45 billion assigned to Amalgamated Fund Tier 2 payments. This disbursement includes the partial bailout programme, which entailed the proactive payment of a threshold sum of up to 50,000 to clients of Blackshield/Gold Coast and other companies who had not received winding up orders from the Court by October 2020 but whose claims had been validated.
Altogether, it said 73,541 claims, amounting to ¢1.34 billion have been paid to Blackshield/Gold Coast clients in the partial bailout programme. Out of this amount, a total amount of 757,539,141 has been used to fully settle 61,734 claims of Blackshield/Gold Coast customers.
Full disbursement can only occur after validation of claims. SEC also emphasise that the full disbursement of bailout funds only occurs after validation of claims and a winding-up order by the Court.
This is to ensure that all claims are verified, and the assets and liabilities of the companies are transferred to the Office of Registrar of Companies.
In compliance with the Corporate Insolvency and Restructuring Act, 2020 (Act 1015), as amended by the Corporate Insolvency and Restructuring (Amendment) Act 2020 (Act 1031), a winding-up order can only be granted by a Court, hence the ongoing court process between the Office of the Registrar of Companies and Blackshield/ Gold Coast.
The Office of the Registrar of Companies, it said, has been granted 44 winding-up orders by the Court and only two are outstanding, namely Blackshield/ Gold Coast and Kron Capital Ltd.
Liquidation petition stalling government’s full bailout programme. Furthermore, the SEC said, the liquidation petition is still pending in court and thus stalling the government’s full bailout programme for the affected clients.
“Blackshield/Gold Coast have filed applications at various courts to challenge the SEC’s decision to revoke its license. The unfortunate consequence of this action is that the Official Liquidator cannot complete the liquidation process, which has subsequently impacted Government’s ability to roll-out the bailout programme to the remaining affected customers of Blackshield/ Gold Coast.”
It concluded, saying, the government has demonstrated commitment to the bailout program as evidenced in the partial bailout which has benefitted customers of Blackshield/Gold Coast.
Source: myjoyonline
