Accra (Greater Accra) 14 June ?99

The Council of the Ghana Stock Exchange (GSE) has expelled United Securities Trust Limited (USTL), one of its listed licensed dealing members (LDM's).

This follows the conclusion of hearing of a complaint received from Enterprise Insurance Company (EIC), a listed company on the Exchange.

The hearing revealed that USTL had grossly violated the code of business conduct of LDM's, particularly regulations 42 and 44 of the Exchange's membership regulations, 1991 (LI 1510).

According to a statement signed by Mr Yeboah Amoa, Managing Director of the GSE, USTL was found to have misrepresented to the EIC that it had license to deal in government securities.

It had also invested in equities with the clients funds against EIC's express instructions to invest the funds in government treasury securities.

It said USTL further wrote letters to the client and took certain actions, which sought to portray that the investments in the treasury securities had been made when in actual fact, that was not the case.

When the client discovered the truth, and demanded a refund of its monies, USTL only settled the remaining debt of about 328 million cedis then due the client.

"Council of the Exchange at its 69th meeting held on Tuesday, June eight, therefore, invoked its power under Regulation 30(2) of LI 1510 to expel USTL from the Exchange's membership with immediate effect after very careful deliberation.

".. USTL's membership certificate has accordingly been deemed cancelled".

"In view of this, USTL shall not be allowed to trade on the Exchange nor sponsor any listings thereon or undertake any business through the Exchange as an LDM."

However, exceptionally, all secondary market transactions that had been executed by USTL as at Monday, June seven, through the exchange should be settled by Monday, June 14.

The statement said "all unexecuted orders of USTL's clients be effectively halted and transferred to other LDM's with immediate effect".

The Council has also ordered the closure of USTL's clients' accounts and the return of monies and other assets to it by Monday, June 14.

They should also send their final financial returns, regarding clients account to the GSE.

The Company should confirm in writing to the GSE that all the directives have been complied with.

The GSE Council assured all investors and the public that competence and professionalism continues to be the cornerstone of the market, adding that the Exchange would continue to ensure that all the market operators adhere to the rules of the market.