The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has filed an application at the High Court seeking an order to liquidate Bluthorn Fund Managers (BFM).
NBFIRA acted on the statutory manager’s recommendations and filed an application at the High Court.
This comes after the regulatory authority discovered during its supervisory activities in May 2019 that BFM was not fully compliant with the relevant financial services laws. It was further discovered Bluthorn channelled the majority of investor funds into one of its related companies being Prime Employee Benefits.
“Failure by the management of Bluthorn Fund Managers to satisfactorily and timeously rectify the areas of non-compliance observed, despite repeated engagements, led the authority to place it under temporary closure from January to April 2020 and then subsequently under statutory management from April 2020 to date,” a statement from NBFIRA read.
The authority licensed Bluthorn Fund Managers in 2016 to operate as a Collective Investment Undertaking within the capital markets industry, having satisfied the licensing and legislative requirements.
“Bluthorn managers’ audited financial statements of February 2018 revealed that the company was insolvent as liabilities exceeded assets and the authority requested BFM to recapitalise accordingly,” NBFIRA said.
Bluthorn managers did recapitalise shortly thereafter, however, a subsequent on-site inspection by the authority revealed that BFM had not recapitalised appropriately.
However, the authority reassures Bluthorn’s clients that a liquidator has the legal authority to take a number of steps to recoup funds on behalf of BFM’s creditors. These statutory powers include but are not limited to engaging forensic auditors to trace funds that have not been accounted for, as well as taking appropriate legal action against Prime’s debtors in an attempt to recoup investors’ funds.