The Administrative Hearing of the Securities and Exchange Commission (SEC) will, by the close of Friday, 12 June 2020, rule whether CDH (now Inter Market), Gold Coast Securities (now BlackShield), Legacy Capital, among others will get back their licences that were revoked last year for failing to operate within the Securities and Industries Act, 2016 (Act 929).
According to Deborah Mawuse Agyemfrah, Deputy Director of Legal Affairs at SEC, these companies are being given favourable hearing after appealing against the revocation of their licences by the SEC.
However, the favourable hearing does not guarantee a restoration of licences.
Speaking on a number of issues arising as a result of the clean-up of the securities industry which culminated in 53 fund management firms having their licences revoked, Mrs Agyemfrah said SEC will forward to the Attorney General the names of the companies, shareholders and directors who flouted the securities law.
This is after the forensic auditing of the accounts of the 21 firms has been done.
“Before we did the revocation, we did forensic auditing of 21 companies who had issues. All the auditing we did is not just a fluke; we will forward the auditing report to the Attorney General who has the power to prosecute. SEC doesn’t have the power”.
“But the forensic auditing done, report being done, validation being done, the work of the Official liquidator, with regard to the funds, will end up at the Attorney General”, she said on Accra-based Peace FM.
The locked-up investments of the collapsed fund managers are believed to have shot up to GHS12 billion.
This was after the investments were validated by the collapsed 53 fund managers across the country.
Mrs. Agyemfrah advised customers who are yet to pick forms for validation of their investments to do so at PwC since it is very important.
She explained further that the official liquidator will trace where the locked-up funds ended up, adding, “They are still searching for where the funds were kept; those who invested should have asked questions about where the companies were going to get monies to pay the huge interest they were offering before accepting. One of the pillars of capital market is honesty and fairness.”
She, however, said the government, as part of its social intervention programme, will make available funds to settle the investors’ locked-up funds.
Mrs Agyemfrah said several reforms are taking place to ensure a stable securities industry.
These include a significant increase in the minimum capital and new guidelines for operating firms.
In November 2018, SEC withdrew the licences of 53 fund management companies.
They include Beige Capital Limited, Brooks Asset Management Limited, EM Capital Limited, Frontline Capital Advisors Limited, FirstBanc Financial Services Limited, Ideal Capital Partners Limited, Liberty Asset Management Limited, Liberty Asset Management Limited and McOttley Capital Limited.
HFC Capital Partners Limited, Serengeti Capital Limited and Verit Investment Advisory Limited, however, ceased operations.