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Business & Finance | Nov 16, 2004

BOG gives CDH Group 90 more days

GNA

Accra, Nov 16, GNA - The Bank of Ghana (BOG) and the Securities and Exchange Commission (SEC) on Tuesday gave CDH Group 90 more days to enable the Interim Management Board produce and implement a credible restructuring and refinancing plan.

The plan is a major requirement for the restoration of the licenses of the CDH Discount Company Limited, CDH Asset Management Limited and CDH Securities Limited.

A statement issued by the BOG and SEC said the decision followed the expiry of the 30-day extension period earlier granted to the group. In August, the Central Bank commissioned Pricewaterhouse Coopers to conduct a comprehensive audit into the operations of the CDH Discount House Limited and the CDH Financial Holdings and all its subsidiaries, following what it said was the critical financial state of the company. It has underlined the failure of the Group Management and Board of Directors to implement any credible remedial measures to address the situation.

Consequently, the SEC suspended the licences of CDH Securities and CDH Asset Management while it reviewed the Companies' past operations. The moratorium was since extended on two occasions to enable the Central Bank to assist the companies to update the accounting and transaction records to prepare credible financial statement and reports and establish the finical position and viability of each member of the group as well as the financial position of the group.

Currently, it is only the CDH Insurance Company Limited, which had been given the green light by BOG to restart operations after it survived a probing search of its operations.

Shareholders of CDH Discount Company Limited and its affiliates dissolved the Board of Directors of the affected companies and appointed an interim Management Board to prepare "a credible" management and financial restructuring plan for the companies, including infusion of fresh capital.

The action followed a 30-day deadline given to shareholders to inject fresh capital to bring the companies' negative networth to positive networth and also meet minimum capital requirements. However, the Bank of Ghana and SEC, which are the Regulators, decided after considering the submissions of the Interim Management Board that the licences of CDH Discount Company, CDH Asset Management Company and CDH Securities Ltd would remain suspended.

Meanwhile, the BOG said individuals and institutions that have holdings of Government of Ghana Securities (such as Treasury Bills, Bonds or stocks) purchased through the CDH Discount Company Limited that Government would redeem its obligations on request subject to proof of purchase.

Individual customers must produce evidence of the purchase of treasury bills, bonds with the company such as deal slips, receipts among others.

In addition, they must produce two passport-size photographs and one of the following - passport, Voter's ID Card and Driver's Licence. However, institutional holders will require a formal letter from their management.

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