The recently announced GH¢1.5 billion bailout from the government will not benefit members of the Locked-up Investment Holders Forum. This is because the primary issue preventing the retrieval of their locked-up funds is the failure of the Bank of Ghana to revoke the licenses of the insolvent finance institutions.
During the massive financial sector cleanup, the Bank of Ghana did not revoke the licenses of certain finance houses and savings and loans companies, as they appeared solvent at the time of the exercise. However, these financial institutions have since become insolvent and are now unable to pay their customers’ investments, prompting the need for the regulator to revoke their licenses.
Dr. Adu Anane Antwi, convenor of the Locked-up Investment Holders Forum, stated that the Bank of Ghana has not revoked the licenses, which is a necessary step for the government to make provisions for a bailout. In an exclusive interview with The High Street Journal, Dr. Adu Anane Antwi explained, “Those licenses were not revoked at the time. The Bank of Ghana thought they were still solvent and could work, but now it has proven that they were also not solvent, and that’s become a problem.”
The Central Bank is currently unable to revoke the licenses of these finance houses and savings and loans companies because there are no available funds to bail out the affected customers until the Ministry of Finance allocates the necessary provisions. “The bank is unable to revoke their licenses because they say when they revoke their licenses, they must pay us. They don’t have the funds available to pay until the Minister of Finance makes those provisions,” Dr. Anane Antwi noted.
The Locked-up Investment Holders Forum has vowed to continue picketing to put pressure on both the Bank of Ghana and the Ministry of Finance to take the required steps for their bailout program. “We are still on our case, picketing until some provisions are made for the Bank of Ghana to revoke the licenses of these institutions. These four institutions cannot pay their clients. Without the revocation of the license, it doesn’t become something that will be paid to you because it is assumed that they are still operating,” Dr. Anane Antwi emphasized.
The renewed calls from this group of aggrieved customers with locked-up investments follow the latest announcement by the Securities and Exchange Commission (SEC) of the release of GH¢1.5 billion to compensate investors affected by the 2019 revocation of fund management licenses. Fund management companies such as Blackshield Capital Management (formerly Gold Coast Fund Management) and Kron Capital are among those included in the bailout.
This announcement comes in response to significant backlash over an earlier proposed bailout of GH¢700 million, which many stakeholders deemed insufficient to address the scale of investor losses.
However, Dr. Anane Antwi and the Locked-up Investments Holders Forum will not benefit from this GH¢1.5 billion bailout, as their companies fall under the regulatory purview of the Bank of Ghana and not the Securities and Exchange Commission.
