JoyNews has obtained a document which appears to suggest that the Finance Ministry ordered the shutdown investment and fund management companies like Gold Coast Fund Management Limited.
In the letter dated May 23, 2018, the Securities and Exchange Commission was partly directed by an official of the Finance Ministry to take the action “to protect customers and investors' interests.”
The said letter, which was written and signed by Chief Director of the Finance Ministry, Patrick Nomo, further indicated such action will let the public have confidence in government “and also prevent any impending demonstrations that will make the government unpopular.”
The SEC on November 8, 2019, revoked the operating licences of 53 investment companies including Blackshield Capital Management (formerly Gold Coast Fund Management). The company is owned by politician and businessman, Dr Papa Kwesi Nduom.
The revocation of the licences, according to the regulator, was to protect the integrity of the securities market and investors.
However, it is now emerging that the SEC appears to have been pushed by the Finance Ministry to take the action to avoid public disquiet especially with 2020 being an election year.
“We should all be reminded that next year is an election year and for that matter, we must not give room for any unnecessary agitations by customers of these companies as it happened to the DKM and others,” the Finance Ministry’s letter indicated.
Copied in the letter are the Chief of Staff, Secretary to the President, Secretary to the Vice President, Secretary to the Senior Minister, and the Chairperson of the Cabinet Committee on Economic Matters.
Details of the letter are reproduced below:
Reforms in the securities market
This is kindly to remind you of your mandate under Securities Industry Act (Act 929) to protect investors, maintain surveillance, monitor solvency and above all, protect the integrity of the Capital Market.
However, the current situation facing some specified Fund Management Companies in the country having been directed several times to protect customers and investors interests call for a concern.
It is against this backdrop that you are hereby directed to revoke the licenses of those companies particularly, Gold Coast Funds Management Company that have failed to return clients funds which remain locked up.
This will let the public especially, customers, clients and investors of those Fund Management Companies have confidence in the government, and also prevent any impending demonstration that will make the government unpopular.
We should all be reminded that next year is an election year and for that matter, we must not give room for any unnecessary agitations by customers of these companies as it happened to the DKM and others.
I should be grateful if you could take requisite action on the decision by the Ministry.