The Receiver for the defunct Microfinance and Savings & Loans and Finance House Eric Nana Nipah, who doubles as a Director of PricewaterhouseCoopers (Ghana) Limited (PwC) has announced in a statement that former staff of the finance institutions will be paid their salaries.
The negotiations starts today Monday July 13.
According to him, this comes after the Bank of Ghana (BoG) has agreed to pre-finance the full outstanding salaries and negotiated and exit packages of former employees of the defunct 347 microfinance firms and 23 savings and loans companies and Finance House firms.
Following the revocation of the licences of the 347 microfinance companies and and 23 savings and loans companies, a validation of the affected customers commenced on November 18, 2019, with the aim of repayment..
Accordingly, the Receiver is compelled to undertake a detailed assets tracing and forensics exercise in collaboration with the Economic and Organised Crime Organisation (“EOCO”) to locate and recover the assets of the insolvent companies to auction and accrue funds for settlement.
Mr Nipah’s statement said : “To ameliorate the economic impact of the resolution exercise on former employees of these affected companies particularly in these times of COVID, Bank of Ghana has agreed to pre-finance the full settlement of employee related claims which otherwise rank as Unsecured claims in the receiverships of these companies.
“The Receiver will in the week commencing Monday, 13 July 2020, engage with the authorized representatives of the ex-staff to agree on modalities for the payment of outstanding salaries and exit packages to ex-staff of these resolved institutions,” the statement said.
“In line with the hierarchy of creditor claims set out under Act 930, other creditors of the failed institutions will be settled by the Receiver upon validation of their claims and to the extent that the Receiver is able to realize value from the remaining assets of these institutions.”
It added “poor quality of assets of some of these institutions, asset diversion and misstatement of a significant number of assets of some of these companies in the financial records of these resolved companies are slowing the pace of recovery.”
“The consequence in pursuing this recovery route is that creditor claims including employee related claims in the resolution of the affected MFCs and S&Ls are not likely to be settled any time soon.”