The Management of Dr Papa Kwasi Nduom’s Black Shield Capital Management Limited has said the basis for the exclusion of their customers from governments intended bailout of some customers of the 53 defunct Fund Management Companies given by the Securities and Exchange Commission (SEC) is nothing short of an attempt to cast its significant shareholder, Dr Papa Kwasi Nduom in a bad light in the eyes of their customers and the general public.

Reacting to a circular by the SEC in respect of a validation exercise being conducted for the payment of affected customers of the defunct FMCs, the management of Black Shield said the SEC made false and inaccurate statements as being the basis for their customer's exclusion from the exercise.

“The attention of Black Shield Capital Management Limited has been drawn to a circular issued by the Securities and Exchange Commission (SEC) in respect of the validation exercises it is conducting for the payment of affected customers of the various fund management companies whose licences were revoked by SEC. In the said circular, SEC has made a number of false and inaccurate statements as forming the basis for the exclusion of customers of Black Shield from an intended government bailout package.

These claims are false, inaccurate, and are intended to cast the management of Black Shield especially its significant shareholder, Dr Papa Kwesi Nduom in a bad light in the eyes of its customers and the general public hence this rejoinder,” the management stated in a rejoinder.

Giving a background into their licence revocation on November 8, 2019, by the SEC, the appointment of Pricewaterhouse Coopers (PwC) Ghana to conduct a forensic audit on the operations of Blackshiel and, the subsequent filing of a case challenging the licence revocation, the management responded to several of the allegations made by the SEC in their rejoinder.

Firstly, the management said, “the claim that Black Shield submitted data capable of verifying only 3% of claims filed by customers is an absolute falsehood intended to blame the inability of the SEC to validate claims of clients on BlackShield. The SEC has at all times material possessed and had access to all client information of Black Shield. The real challenge, as BlackShield has consistently drawn the SEC’s attention, is the SEC’s attempt since revoking its licence to manage customers’ information without recourse to BlackShield; this attempt is not helpful and has yielded no results as evidenced by the failure to successfully validate clients’ investments despite having control of all records of BlackShield.”

Again, the management said there were surprise the SEC having refused their application to cease executing the order of licence revocation is using the pendency of the same matter as an excuse to perform a duty which BlackShield has always supported and encouraged the SEC to do. Thus, the payment of affected customers.

According to them, the customers of Black Shield constitute about 80% of total claims made in respect of affected fund managers, and therefore if the SEC can conveniently exclude customers of Black Shield, then it saves them the arduous task of dealing with a majority of the claims while laying the blame on Black Shield.

The management, however, stated “that as it has indicated in the past, it is in support of the SEC paying its customers notwithstanding its legal issues with the SEC. In fact, Black Shield has encouraged the SEC to use part of the funds which the Government of Ghana owes it, to pay its customers hence the proposed bailout package from government is very much welcome. Black Shield is ever ready to join hands with its customers for part of funds owed Black Shield by government to be used to pay them.”

Reiterating its readiness to work with the SEC for the inclusion of its customers in the government bailout package, notwithstanding its marked disagreements with the SEC, the management concluded by asking customers to note that “the failure of the SEC to pay them their funds is not as a result of any act or omission by Black Shield but perhaps a sheer attempt to evade the assumption of the responsibilities for BlackShield clients who constitute over 80% of affected clients in the Fund Management industry”.

Read the full rejoinder by the Management of Black shield below: