The Registrar-General’s Department, the official Liquidator of the 53 defunct fund management companies will from September 7, 2020 begin a scheduled virtual meeting with creditors.
A statement from the Registrar General’s Department stated that all customers of the collapsed fund management companies will be met virtually for the first creditors meeting.
The Registrar-General will first meet creditors of 22 out of the 53 collapsed fund managers for Phase One. The remaining creditors will be met after the completion of the first virtual meeting.
The Securities and Exchange Commission, (SEC) in November last year revoked the licenses of 53 fund management companies.
The SEC said the affected companies failed to return client funds which remained locked up in, contravention of the investment rules.
Government wants to cap payments to investors who gave their funds to the liquidated companies but many investors are demanding full repayment by government, threatening to vote for the political opposition in the upcoming elections if this is not done.
Importantly, government is not under any legal obligation to pay off the investors though since their investments were never guaranteed by the state. Indeed the licenses of some of the affected fund managers were revoked by the regulator for guaranteeing returns on investment which SEC points out is both illegal and impracticable.
Nevertheless there is agreement that government should at least partly refund investors whose fund managers had their licenses revoked for regulatory infractions rather than for insolvency, since without the regulatory action those investors would still be enjoying access to their funds principal and interest inclusive.