Graphic Online

Graphic Online 

SEC probes 10 companies for violating regulations

BY: Suleiman Mustapha
Director General of the SEC, Rev. Daniel Ogbarmey-Tetteh
Director General of the SEC, Rev. Daniel Ogbarmey-Tetteh

The Securities and Exchange Commission (SEC) has placed 10 asset management companies under probe after several complaints from the investing public.

The complaints border on the violation of securities regulations.

Consequently, the SEC has warned the public not to transact business with the companies in order not to expose their businesses to avoidable risks.

The companies are Brooks Asset Management Limited, Weston Capital Limited, MEC-Ellis Investment Ghana Limited, Kamag Capital Ghana Limited and MAK Asset Management Limited.

The others are EM Capital Partners Limited, MET Capital Group Limited, Canal Capital Limited, Man Capital Partners Limited and Alpha Capital Securities Limited.

Sources at the SEC said the asset management companies had, for several months, not been able to pay their clients or investors any returns on their investment and had also not been able to refund the investment.


A statement by the commission stated in part that “the licensed operators engaged in fund management activities in the capital market are under investigation for numerous pending complaints levelled against them by the investing public bordering on violation of provisions of the Securities Industry Act, 2016 (Act 929)”.

It added that investigations were ongoing and the public shall be given further notice in due course.

The Daily Graphic can confirm that many assets management and insurance companies have heavily invested in distressed microfinance companies and that has triggered the SEC to initiate investigations.

Fraud and scandals

But analysts are worried that the wave of scandals, fraud and embezzlement in some microfinance companies are unsettling, while the authorities at the central bank are currently undertaking a comprehensive review of the sector to sanitise it.

A senior economic analyst at the investment firm, Databank, Mr Courage Kingsley Martey, lauded the move by the investment industry regulator and said the effort should be sustained to clean up the industry.

“It is necessary for the SEC to sustain this effort to clean up the investment space to make way for credible investment houses which can offer sustainable returns that are realistic and consistent with prevailing economic indicators,” he said.

“For me, these house-cleaning measures are long overdue and badly needed to realign investor expectations with current economic trends and restore confidence in Ghana's financial system,” he added.

Declining yields

He said coming from four years of consistent high and double-digit nominal yields, investors were failing to come to terms with the new reality of a sharp decline in yields.

Consequently, some investment houses appear to be on the lookout for yield-hunting investors who fail to question the returns promised, in the light of declining benchmark yields.

The Bank of Ghana, for its part, has stepped up the clean-up of the banking system since last year and is instituting other reforms to strengthen the banking sector.

Complement BoG move

Analysts say this move by the SEC will complement the actions of the central bank to shake up the financial service industry to boost investor confidence.

In March this year, the SEC announced that it would begin a quarterly briefing and conduct reviews, investigations and evaluation of companies within the securities and capital market to expose the bad lot.

According to the Director General of the SEC, Rev. Daniel Ogbarmey-Tetteh, the financial market thrived on public confidence.

To this end, the quarterly briefing will be used to name and shame bad companies and operators who are not going according to the rules, regulations and guidelines of the sector.

Assess financial health

The SEC is also expected to assess the financial health of companies under its supervision for the public to make informed decisions.

The probe by the commission of some asset management companies comes out of the failure of DKM and other microfinance companies which promised higher-than-normal rates and later defaulted.

Breakfast Series
Register for Graphic Business - Stanbic BANK Breakfast Meeting.