- What is the Background of the Partial Bailout Package?
The Partial Bailout Package is being offered to clients of defunct fund management companies who do not have the winding up orders from the court yet. It was a decision taken by the Government of Ghana after series of engagements with the Securities and Exchange Commission (SEC) noting that many clients were suffering and were in very difficult situations. The Government therefore decided that instead of waiting for the court orders, some relief will be given affected investors before the final bailout.
- Which clients do the Partial Bailout Package cover?
The Bailout package covers all clients of the Fund Management Companies that have not received court orders yet. It includes clients of Blackshield Capital Management Limited (formerly Gold Coast Fund Management), Ideal Capital, FirstBanc Financial Services Limited and Liberty Asset Management Limited, among others.
- Why has this Partial Bailout Package by Government been introduced now?
The Government of Ghana is very mindful of following due processes, so the court process was what was ideal however, discretion was exercised to introduce this partial bailout as an interim measure taking into consideration the severe hardship that clients are facing at this time, which has been further compounded by the Covid-19 pandemic.
- Is it true that Clients will be issued shares or bonds instead of cash when they sign the agreement?
The Fifty Thousand Cedis (Gh₵50,000) bailout package is in cash. This will be paid at a designated GCB Bank branch after completion of the outlined process explained below.
- What are the steps clients must take to get this cash bailout package?
Affected clients must follow the following three-step process to access the partial cash bailout:
- Step 1: Accept Offer
- Use the claim ID sent by SMS to accept the package at bailout.rgd.gov.gh. Be sure to click ‘Submit‘ at the end. Clients will then receive a text message with their AM Fund account number.
- Step 2: Onboarding/KYC
Clients must upload their onboarding documents (passport picture, ID document, address document, etc.) at www.gcbcapital.com.gh/bailout. Clients will then receive a text message with their GCB bank account number and branch. They will receive an alert when their monies have been paid into their designated GCB Bank accounts.
- Step 3: Collect Cash
- Clients must then go to a GCB Bank branch with copies of the onboarding documents which they uploaded. Their accounts will be activated after which they can access the cash.
- What is the advice for clients who have not yet applied for the package?
All clients are urged to follow this process because the Government has assessed how long it would take to get assets of these companies, sell them, and pay clients and has stepped in to provide the Gh₵50,000.00 as an interim relief. All clients of affected fund management companies are therefore encouraged to agree to the conditions that have been put in place to enable them to access their funds.
- Where can clients get the most reliable source of information on the bailout situation?
The Securities and Exchange Commission (SEC) being the regulator of the capital market in Ghana is the most reliable source of information regarding the bailout situation. The SEC has consistently provided information on the partial bailout. On the 18th of November 2020, a press statement from the SEC informed clients of this partial bailout. Issued as a sequel on 26th November 2020 was another press statement which reiterated key details regarding the bailout situation. Please visit the SEC website at www.sec.gov.gh or call toll free line 0800100065 to be regularly updated.
- How does this cash bailout influence the ongoing processes in court and how will this affect customers with amounts in excess of Gh₵50,000.00?
The partial bailout does not stop the court processes. The Government has indicated that the court processes will go on and in the interest of justice, the court process cannot be rushed. The ongoing court processes will therefore go together with the partial bailout. For clients who have more than Fifty Thousand Ghana Cedis (Gh₵50,000), they should be assured that once the court order is granted in favor of the Registrar-General (Official Liquidator), the full bailout package will be rolled out to them.
- Have payments to clients begun?
Payments have commenced for the bailout package (both full and partial). Over 2,802 clients have accessed the package with an aggregate value of Gh₵322.75 million to date. The payments are still ongoing.
- What is the difference between the partial cash bailout package & the full bailout package?
The Full Bailout:
The full bailout is the package the Government introduced for investors of the defunct fund management companies with liquidation orders secured by the Registrar-General (Official Liquidator) through a Special Purpose Vehicle (SPV) capitalized by Government.
- Investors (Claimants) who choose to participate in the Bailout Program shall exchange their interests in the defunct FMCs for shares in the Allocations will be based on validated claims.
- Claimants shall receive a portion of their validated claims in Tier 1 shares of the SPV, and a portion in Tier 2 shares of the SPV explained below:
Tier 1 Shares of the Fund:
- Each investor shall get a portion of their claim in Tier 1 shares of the fund.
- This will allow for liquidity to holders of these shares on short notice.
Tier 2 Shares of the Fund:
- Tier 2 shares in the Fund shall be medium term in nature. Withdrawals on 50% of these shares can be effected from the 2nd anniversary of the Fund. However, withdrawals of any portion of these shares without restrictions can be made from the 3rd anniversary of the Fund.
Full Bailout Formula By Customer Categories:
The full bailout is staggered by different customer categories as shown below:
- All individuals below 60 years:
Will get up to GHC70,000 or 20% (whichever is higher) of their validated claims in Tier 1.
- All Pensioners of 60 years and over:
Shall get ALL their validated claims in Tier 1.
- All schools, faith-based organizations and hospitals:
Will get ALL their claims in Tier 1.
- All Financial institutions:
Will get 50% of their validated claims in Tier 1.
- Associations, Welfare Institutions, Credit Unions & Unions:
Will receive 50% of their validated claims
- All other claimants:
Will get 20% of their validated claims in Tier 1
Regarding the full bailout, investors will have to subscribe to the overall bailout scheme. Claimants who do not subscribe to the bailout scheme will have to wait for a proportional liquidation dividend from the Official Liquidator.
The Partial Bailout:
The partial bailout is therefore an interim measure brought about after several engagements with the Ministry of Finance (MoF) taking into consideration investor’s plight of waiting for a long time while these court processes are still ongoing. The partial bailout is a flat amount of Fifty Thousand Cedis Cash (Gh₵50,000) that will be paid across all customer types in the form of cash. Affected investors who have more than Gh₵50,000.00 exposed will receive their additional funds (in line with the bailout formula) when the full bailout is implemented for their firms, after liquidation orders have been secured.
- Which fund management companies does the partial bailout and full bailout package cover?
The partial bailout is for clients of the firms for whom there are no liquidation orders yet. This includes clients of the following Fund Management Companies (FMC’s):
- Blackshield Capital Management Limited (formerly Gold Coast Fund Management)
- Beige Capital Asset Management
- Apex Capital Partners
- FirstBanc Financial Services Limited
- Frontline Capital Advisors
- Ideal Capital Partners
- Kripa Capital Limited
- Kron Capital Limited
- Liberty Asset Management Limited
- McOttley Capital
- Omega Capital
- Procap Finance Company
- Strategic Hedge Capital
- Universal Capital Management
- Utrak Capital Management
- Wealth Vision Financial Services
For firms in the full bailout scheme (beyond the first 20 FMC’s), eight (8) additional FMC’s have been brought into the scheme. These firms are;
- Unisecurities Ghana
- EM Capital Partners
- QFS Securities
- Ultimate Trust Fund Limited
- SGL Royal Kapita
- Heritage Securities,
- Corporate Hills Investments
- Cambridge Capital Advisors
Additional firms for whom liquidation orders have been obtained but are yet to be gazetted:
- Goldstreet Fund Management Limited
- Global Investments limited.
Clients of these two (2) firms will be brought into the full bailout after their investor and creditor meetings have been held in the coming days.
- When can clients expect the outstanding liquidation orders to be obtained?
Customers may visit www.bailout.rgd.gov.gh for the latest updates regarding bailout liquidations.
- What advice is recommended to clients who received their SMS text messages with validated amounts lesser than their claims?
The SEC has worked on arriving at a validation figure to compare the claims that have been filed by affected customers with the balances in the systems or records of the failed fund management companies. Where variances exist, clients are encouraged to call the help lines to have these issues addressed. Clients with issues of discrepancy on their claim versus the validated amount should call 055-2564472/0242-439453 or send an email to email@example.com.
- Who should I call for enquiries relating to the bailout scheme?
For enquiries with regards to the bailout scheme, on-boarding and non-receipt of AM Fund account number, customers can also call 055-2564472 or email firstname.lastname@example.org for assistance. Clients with requests relating to non-receipt of Claim ID to access the bailout platform are to kindly note that it is an ongoing process, and you will receive an SMS in due course.