25.08.2004 Business & Finance

Review process on securities is ongoing

25.08.2004 LISTEN

Accra, Aug. 25, GNA - The Securities and Exchange Commission (SEC) on Wednesday endorsed the extension of the review process on CDH Discount Company Limited and its affiliates and said the action was in the interest of investors. A statement issued in Accra and signed by Mrs Eudora Koranteng, Deputy Director General of the SEC, said findings to date from the joint review by the regulators and the auditors over the past two weeks had necessitated an extension of the review period.

The statement said the extension was to enable the investigators to properly evaluate the state of CDH institutions. The Central Bank early this month said the operations of CDH Discount Company Limited and its affiliates were in critical financial state.

The Central Bank noted that the financial house required supervisory intervention, but the Management and Board of Directors of the Company had not been able to implement any credible remedial measures to address the situation. Mr Emmanuel Asiedu-Mante, First Deputy Governor of the BoG, told reporters early this month "various on-site-examination reports on the Company revealed serious weaknesses, instances of mismanagement, misapplication of clients' funds and non-compliance with basic legal and regulatory requirements".

Consequently the BoG commissioned Pricewaterhouse Coopers to conduct a comprehensive audit into the entire operations of the CDH Discount House Limited and the CDH Financial Holdings and all its subsidiaries. Mr Asiedu-Mante said the exercise was to assist the Company to update the records and produce credible accounts. Reacting to the measures, the Solicitors of Mr Fred Apaloo, Managing Director of Consolidated Discount House (CDH) Limited, accused BoG of arbitrariness and high handedness in its dealings with CDH Financial Holdings Limited.

The Solicitors, Law Associate Incorporated, said: "We have our client's instructions to point out to the Bank, respectfully, that the same (reasons given for the action) are untenable, wrongful and most arbitrarily." However, the BoG on Tuesday issued a statement to the effect that it had decided to extend the period of moratorium on the operations of CDH Discount Company Limited and its affiliates for two more weeks "to enable a comprehensive report to be obtained from the Auditors".

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