Govt releases GHS1.5bn to bailout 2019 security investors

In an effort to ease the financial burden on investors affected by the 2019 fund management crisis, the government has released an additional GHS1.5 billion to continue its bailout program.

This comes after the earlier release of GHS4.46 billion to settle claims of investors who were impacted by the revocation of licenses of various fund management companies.

The Securities and Exchange Commission (SEC) made the announcement, explaining that the new funds will be disbursed in three tranches between August and December 2024.

The bailout funds are part of the government’s ongoing efforts to mitigate the fallout from the 2019 revocation of licenses, which affected companies like Blackshield Capital Management Limited and Kron Capital Limited.

Thousands of investors were left stranded and unable to access their funds when the SEC revoked the licenses of several firms for failing to meet capital adequacy requirements.

According to the SEC, the first tranche of GHS700 million was released in August 2024, with additional tranches of GHS400 million each set for October and December.

The SEC reports that out of 84,202 examined investor claims, 69,445 claims, representing about 82%, have been fully settled.

The latest GHS1.5 billion release aims to further support investors by offering the higher of GHS50,000 or 15% of their outstanding claims.

This is expected to bring relief to nearly 91% of affected investors.

The funds will be managed through the Amalgamated Mutual Fund (AM Fund), operated by GCB Capital Ltd., with meetings scheduled to help investors understand their options for accessing the funds.

Investors can get more details from the bailout portal or through PricewaterhouseCoopers (Ghana) Ltd., which has been appointed as an agent by the SEC.

The SEC assures investors that the bailout reflects the government’s dedication to safeguarding investor interests and fostering a healthy securities market in Ghana.

The program, which began in 2020, is part of a broader effort to restore stability and trust in the financial sector following the market’s upheaval.