Ghana’s central bank has started liquidation processes against DKM Diamond Microfinance Company Limited, Governor Dr Henry Kofi Wampah has told parliament on Tuesday March 8.
Dr Wampah said DKM promised 50% returns on depositors’ investments in two months, way above the industry’s limit of about 30%, thus, the interest rates were “clearly unsustainable”.
He said prior to the central bank putting a freeze on DKM’s assets, the Bank of Ghana first put a 90-day moratorium on the firm’s operations to allow it pay clients their locked returns, but to no avail, even after a 30-day grace period.
According to Dr Wampah, the central bank realised that DKM’s total deposit liabilities, prior to the freeze, was GHS115.2 million as against a cash flow of GHS10.8 million.
DKM, he added, also invested GHS77million of clients’ investments into its related companies, thus, its inability to pay the clients.
Dr Wampah said since DKM is not in a position to pay its clients’ returns, it was necessary for its assets to be liquidated so it could be used to defray the debt owed its swindled investors.
The revocation process, led by the Registrar General, was started with the revocation of DKM’s licence. Dr Wampah said all of DKM’s assets and liabilities will be valued by PricewaterhouseCoopers before the liquidation is carried through.