The Securities and Exchange Commission (SEC) has announced the release of GHC 1.5 billion to compensate investors affected by the 2019 revocation of fund management licenses including Blackshield Capital Management (formerly Gold Coast Fund Management) and Kron Capital.
This announcement comes after significant backlash over an earlier proposed bailout of GHC 700 million, which many stakeholders felt was inadequate to address the scale of investor losses.
The increased bailout fund will be used to compensate individuals and institutions that lost their investments due to the collapse of certain fund management companies in recent years.
The SEC’s intervention is intended to restore investor confidence in the financial markets and ensure that affected investors receive some form of reimbursement for their losses.
In a statement issued on Thursday, September 12, the SEC stated that the additional capital injection will be disbursed in three tranches, with an initial GHS 700 million in August 2024, followed by GHS 400 million each in October and December 2024.
According to SEC, the latest bailout is part of efforts to provide financial relief to investors in failed fund management firms, in which 84,202 investors have received payments, with 82% of claims fully settled.
“This decision, driven by humanitarian considerations, will provide further financial relief to those impacted by the revocation, including investors of Blackshield Capital Management Limited (formerly Gold Coast Fund Management Limited) and Kron Capital Limited. This bailout covers investors with examined claims who have accepted the Government’s bailout package,” The statement noted.
Under the terms of the new package, SEC affirms that investors will receive the higher of GHS 50,000 or 15% of their outstanding claims.
SEC says it expects this top-up to result in close to 91% of all investors being fully compensated stating that the funds will be distributed through the Amalgamated Mutual Fund (AM Fund), managed by GCB Capital Ltd.
SEC further noted that The managers of AM Fund will hold a meeting in the coming days to provide guidance for those who would want to access the released funds as well as the prospects for leaving the claims in the AM Fund to be managed.
