Four out of the 50 Fund Management Companies (FMCs), whose licences were revoked by the Securities and Exchange Commission (SEC) have filed applications in Court challenging the decision.
A statement issued in Accra by the Commission said the cases were at various stages in Court and had resulted in a situation, where no other action could be taken by the SEC or the Registrar General to proceed with official liquidation and Government bailout of the clients of the four FMCs until the Court had decided on them.
It said Blackshield Capital Management Limited (Formerly the Gold Coast Fund Management) appealed to SEC’s Administrative Hearings Committee (AHC) and was, however, unsuccessful in its appeal.
It said, subsequently, Blackshield Capital Management Limited had filed a case in court seeking a review of the AHC decision.
“Hearing of this case commenced on 28th July 2020 and would resume after the legal vacation,” it added.
It said Firstbanc Financial Services Limited also filed an application in Court for a Judicial Review of the revocation of their licence but judgment was given in favour of the SEC.
The statement said Firstbanc Financial Services Limited had commenced the processes in the Court of Appeal against the decision and on August 10, 2020, and had filed an application for an injunction pending the determination of the appeal.
It said Apex Capital Partners also filed an application for a Judicial Review of the revocation of its licence and judgment was given in favour of the SEC.
“Apex Capital Partners appealed against the decision in the Court of Appeal on July 8, 2020,” it added.
It said Ideal Capital Partners Limited, after withdrawing an initial court case, filed another case on July 29, 2020, against the SEC’s revocation decision.
Hearing of the application by the Court is scheduled to begin on 18th November 2020.
SEC, acting in accordance with Section 122 (2) (b) of the Securities Industry Act 2016, (Act 929) (SIA) revoked the licenses of 53 FMCs on 8th November 2019 due to their inability to return clients’ funds totaling GH¢8 billion, and significant breaches of applicable rules that created risks to financial stability.
The enforcement action taken by the SEC forms part of a general exercise to clean-up the financial sector.