Collapsed microfinance companies : Owners to face prosecution

The receiver of the 347 insolvent microfinance companies whose licences were revoked on Friday, May 31, 2019, Mr Eric Nana Nipah of Pricewaterhouse Coopers (PwC), plans to institute civil action against owners of the collapsed companies to recover lost funds.

This comes as the receiver begins processes to take control of the affected companies.

According to Graphiconline, sources at the Bank of Ghana said, “any persons found to have contributed to the failure of these institutions will be reported to the law enforcement agencies for further action, including possible prosecution, where necessary”.

Customers to be paid within 30 days

Customers of the collapsed microfinance companies who are entitled to claims are expected to be paid within 30 days.

The payments will, however, follow the completion of validation for such claims by the Receiver, Eric Nana Nipah of PricewaterhouseCoopers (PwC).

The Central Bank appointed Eric Nana Nipah, a Director of PricewaterhouseCoopers (Ghana) Limited (“PwC”) as receiver for all the 347 microfinance companies whose licenses were revoked last Friday following what it said was to protect the stability of the financial system and to protect affected depositors.

Receivers duty

In a statement by the BoG, it said the receiver is to among others recover the benefits of creditors as well as satisfy the indebtedness of the affected institutions.

“Whilst the situation assessment is on-going, all creditors including depositors will be requested to submit their completed Proof of Debt (PoD) forms with supporting documentation to the Receiver for validation and agreeing as set out above. The receiver also estimates that the process of validating and agreeing to creditor claims will take another 30 days from the date of the deadline for the submission of Creditor claims”, the statement indicated.

The main duties of the Receiver are “to recover and maximise asset realisations for the benefit of creditors including depositors and distribute realisations in accordance with the relevant provisions of Act 930, to satisfy the indebtedness of these institutions to their body of creditors, to the extent possible.”

“Following his appointment, the receiver has commenced the process of taking control over these affected microfinance companies, as part of the orderly winding up of the operations of these institutions. He estimates that this assessment will be completed within the next 10 days”, portions of the statement added.

During this period of validation and agreeing claims, depositor claims which have been validated and accepted in the receivership will be paid concurrently at designated Consolidated Bank of Ghana Ltd (CBG) branches, to the extent possible.