The Official Liquidator (OL) of the 39 insolvent microcredit companies whose licenses were revoked by the Bank of Ghana (BoG) has announced modalities for the payment of the outstanding fixed investment holder’s obligation:
NOTICE OF FULL PAYMENTS TO FIXED INVESTMENT HOLDERS OF 39 MICROCREDIT INSTITUITONS (IN OFFICIAL LIQUIDATION) WHOSE CLAIMS HAVE BEEN VALIDATED IN THE LIQUIDATION PROCESS
IN THE MATTER OF THE BODIES CORPORATE (OFFICIAL LIQUIDATIONS) ACT, 1963 (ACT 180)
IN THE MATTER OF THE REVOCATION OF THE LICENCES OF 39 INSOLVENT MICROCREDIT INSTITUTIONS BY THE BANK OF GHANA UNDER SECTION 7 OF THE NON-BANK FINANCIAL INSTITUTIONS ACT 2008 (ACT 774) AND APPOINTMENT BY THE BANK OF GHANA OF A LIQUIDATOR UNDER SECTION 38 OF ACT 774 FOR THE OFFICIAL WINDING UP OF 39 INSOLVENT MICROCREDIT COMPANIES
IN THE MATTER OF THE WINDING UP ORDER BY THE REGISTRAR GENERAL UNDER SECTION 3 (4) OF ACT 180 FOR THE OFFICIAL WINDING UP OF 39 INSOLVENT MICROCREDIT COMPANIES
IN THE MATTER OF NOTICE OF FULL PAYMENT TO FIXED INVESTMENT HOLDERS OF 39 INSOLVENT MICROCREDIT COMPANIES
Pursuant to Section 7 of the Non-Bank Financial Institutions Act 2008, (Act 774) the Bank of Ghana revoked the operating licenses of 39 insolvent Microcredit companies on 31st May 2019.
The Bank of Ghana (“BoG”) in accordance with Section 38 of Act 774 has appointed the Registrar General to initiate proceedings as Official Liquidator of the affected Microcredit companies, to wind up the companies by way of Official Liquidation
The main duties of the Official Liquidator are:
- To recover and maximise asset realisations for the benefit of Creditors including mainly Fixed Investment Holders and
- Distribute realisations in accordance with the relevant provisions of Bodies Corporate Official Liquidation Act 1963, (Act 180), to satisfy the indebtedness of these institutions to their body of Creditors, to the extent possible.
As you may be aware, the asset recovery phase of the Liquidations is underway but given the slow pace of realisations arising out of the poor quality of most of the assets of these affected institutions, the Official Liquidator is compelled to undertake a detailed assets tracing and forensics exercise in collaboration with the Law Enforcement agencies, and the successful outcome of this exercise is likely to take some time to achieve. Pursuing this recovery route therefore, the indebtedness of these affected institutions to their body of creditors, including Fixed Investment Holders are not likely to be met any time soon.
In line with Government’s commitment to protect Investors’ funds and to shore up public confidence in the financial system, Government has made available to the Official Liquidator of the 39 affected Microcredit institutions and the Receiver of the 347 Microfinance and 23 Savings and Loans and Finance House companies whose licenses have been revoked, a combination of cash and bonds totalling approximately GHS5bn to fully settle outstanding depositor/fixed investment holder claims of these resolved institutions as well as of the 39 Microcredit institutions in official liquidation.
Modalities for the payment of the outstanding Fixed Investment Holders’ obligations effective Monday 24 February 2020 are as follows:
- Based on information to be provided by the Official Liquidator on Fixed Investment holders due for payment, CBG will open new accounts for all Fixed Investment Holders whose claim(s) have been validated and agreed in the official liquidation of the affected institutions.
- SMS messaging from the Official Liquidator to Fixed Investment Holders due for payment, setting out the Account number and Cash amount due fixed investment holders.
- Accessing funds at any CBG branch by the fixed investment holder showing any of these valid Identity card i.e. Driver’s License, Voter’s Identity Card, Passport, to confirm his or her identity. (A duly notarised Power of Attorney should be presented in respect of Fixed investment holders who have nominated persons to act on their behalf)
A combination of cash and bonds will be used to settle fixed investment holders’ claims. It is expected that with the above funding arrangement comprising part cash and bonds, about 97.6% of individual claimants in number (including individual depositors in the resolved Microfinance Institutions and Savings and Loans and Finance House companies) will be fully settled in cash. Other categories of fixed investment holders including corporates will be fully settled through a combination of cash and bonds.
Please note that the Official Liquidator will fully settle outstanding fixed investment holder claims once these claims have been validated and agreed in the liquidation process. Please note further that the Official Liquidator continues to validate fixed investment holders’ claims not yet validated and agreed in the liquidation and will communicate the status of fixed investment holder claims submitted within the claim deadline period, as and when they have been validated and agreed in the official liquidation of the above affected companies.
Stakeholders may direct all concerns on the above liquidations to the Official Liquidator, Registrar General Department, Ministries, Accra or to Tel: + 233 (0) 242 439 441
DATED AT THE OFFICES OF THE REGISTRAR GENERAL’S DEPARTMENT, ACCRA THIS 21 DAY OF FEBRUARY 2020
JEMIMA MAMAA OWARE (MRS)