Why Databank has closed its offices
Fund management company Databank has announced the closure of its offices and remote work for its staff effective today (December 22, 2022) following physical and verbal attacks on them by some of its clients.
The company in an email to its clients said it had been affected by the liquidity challenges that have rocked the fund management industry owing to the "macro-economic crisis" facing the country.
It said the crisis had resulted in the company's inability to pay withdrawal requests and impacted its original two-week estimate for withdrawals.
"We are currently engaging with the Ministry of Finance, our Regulator (The Securities and Exchange Commission (SEC)), and the Ghana Securities Industry Association regarding the impact of the debt exchange on Databank’s mutual funds as well as other Collective Investment Schemes," the email said.
"As part of these discussions, the SEC issued a notice to Market Operators (SEC/CIR/005/12/22) on December 9, 2022, indicating its intent to support the market with much-needed liquidity relief, including access to the Financial Stability Fund as a last resort. Therefore, we are hopeful that once the Debt Exchange Program has been concluded (expected settlement date: January 5, 2023), we will be able to access the necessary funds to once again pay withdrawal requests. We are totally reliant on the Government of Ghana to pay us, so we can in turn pay clients".
The statement said while many clients had tried to be patient, others had resulted to abusing staff and threatening their lives as well as their families.
"Many of our clients have tried to be patient with us as we wait for the Government to provide liquidity. For this, we are extremely grateful. However, there are several clients who have felt the need to abuse our staff physically and verbally, and also threaten their lives as well as their families. As such, we have no choice but to move to a work-from-home option," the email said.
"While our offices will be physically closed, we will continue to serve you and process transactions remotely, and all our digital channels will remain open just as we did during Covid. However, we cannot endanger the lives of staff by opening the office without any available liquidity.
"We are fully aware the current crisis in our industry is very concerning, and we continue to ask for your patience during these difficult times. We are very hopeful the Financial Stability Fund or any other Fund that the Government may provide in the interim will provide much-needed relief for you and other investors. We will provide another update once we have a clearer view of the situation".