Shippers Authority uncertain of recovering GH¢S1m from liquidated Gold Coast Securities – A-G report

The Ghana Shippers Authority (GSA) is uncertain of recovering a total investment of GH¢1,162,527.20 (interest inclusive) in Gold Coast Securities which was rolled over on 20 November 2017 due to the distressed nature of Gold Coast Securities.

The license of Gold Coast Securities was revoked by the Securities and Exchange Commission (SEC) in 2019.

The revocation of the license of the company and others in 2019, according to SEC, was necessary as the “companies had largely failed to return client funds which remain locked up and in a number of cases, they had even folded up their operations.”

These actions were taken pursuant to Section 122 (2) (b) of the Securities Industry Act, 2016 (Act 929 or “the Act”) which authorizes the Securities and Exchange Commission to revoke the license of a market operator under certain conditions.

SEC explained that the firms “have failed to perform their functions efficiently, honestly and fairly and in some cases are in continuing breach of the requirements under relevant securities laws, rules or conditions, despite opportunities provided to them by the SEC within a reasonable period of time to resolve all regulatory breaches”.

SEC said it “has concluded after extensive engagement with these institutions that their continued existence in the light of their conduct poses severe risks to the stability of the capital market and to the interests of investors”.

The Ghana Shippers Authority’s investment in the now-defunct Gold Coast Securities represents 6.7% of the total investment portfolio of the Authority as of 31 December 2019.

This was contained in the Auditor-General’s report on the public accounts of Ghana, public boards, corporations, and other statutory institutions for the period ended 31 December 2020.

The A-G has, therefore, recommended to the management to immediately carry out an assessment of the extent of investment impairment, and make adequate provisions and disclosure in their financial statements and to monitor the performance of the investments at regular intervals.”

The report further stated that two tenants, occupying portions of Takoradi Shippers Centre owed the Authority rent to the tune of GHS470,146.87 on 31 December 2019. The period of the rent due ranges from six months to 48 months.

The report urged the management to pursue the defaulters for the rent arrears or terminate the tenancy agreement accordingly.

Also, 73 shipping lines owed the Authority an amount of (US$1,724,625.77 @ GH¢5.60 ? GH¢9,657,904.31), some dating as far back as 2014.

In order to ensure that trade debtors could be fully realized, the A-G advised management to embark on debtors’ circularisation, for the shipping lines to own their full indebtedness and to put in place measures to retrieve the debt or apply the relevant regulations to retrieve the amount. Read Full Story