The Securities and Exchange Commission (SEC) has distanced the recent revocation of the licenses of the 53 fund management companies from the banking sector shake-up stating that the latter is not responsible for the current happenings in the securities sector.
According to SEC, although some collapsed fund managers had their funds locked up in savings and loans and microfinance companies that were placed into receivership by the Bank of Ghana, assertions that both instances intertwine with one another ought to be critically examined.
Since the news of the fund managers broke, many have argued that the banking sector crisis provided the last trigger that compounded the woes of some of the affected fund management companies.
But speaking on The Point of View on Citi TV, Director General of the SEC, Rev. Dr. Daniel Ogbarmey-Tetteh maintained that it will be inaccurate for anyone to suggest that the cleansing of the securities sector was a rippling effect of the reforms made by the Bank of Ghana because the two situations may just have occurred alongside.
“I wouldn’t say it was a consequence of [the banking sector crisis]. I would like to say that, it would have happened simultaneously because it’s an ongoing activity and we found out that, the fund managers may invest with a particular entity and they roll over instead of taking the money. It could be that at the time that the investment was made, things were okay. But in the course of time, things could have gone bad without maybe the fund managers picking up the signals.“
“So, to say that, it is a consequence of the crisis, I think that it won’t be an accurate representation of the situation, because the reality is that there is interconnectedness between the fund managers and the funds regulated by the BoG. Interestingly, some of the fund managers regulated by the Bank of Ghana also placed money with other fund managers. So I think, to say that, this one led to that won’t be fair”, he stressed
Source: CITI TV