The group’s troubles became a public affair on February 19, 2021 following a High Court judgment placing it under liquidation. Before that the regulatory authority discovered, during its supervisory activities in May 2019, that Bluthorn was not fully compliant with the relevant financial services laws. It was further discovered that Bluthorn had channelled the majority of investor funds into one of its related companies being Prime Employee Benefits. Subsequently, in 2020 NBFIRA filed an application to liquidate BFM after failure by its management to satisfactorily and timeously rectify the areas of non-compliance observed, despite repeated engagements. Initially, the regulatory authority was forced to place it under temporary closure from January to April 2020 and then subsequently under statutory management from April 2020.
Background of facts NBFIRA reportedly licensed BFM in 2016 to operate as a Collective Investment Undertaking within the capital markets industry, having satisfied the licensing and legislative requirements. Following its licensing BFM issued a prospectus in respect of an investment company with the aim of encouraging investors to purchase shares in BFM in order for it to invest the funds in accordance with the provisions of the Collective Investments Undertakings Act. According to court documents, on April 2, 2020, Peter Collins was appointed by the NBFIRA as the Statutory Manager of BFM in terms of Section 46 (4) of the Securities Act. This was on the basis that it appeared to NBFIRA that BFM was not complying with a financial services law, was or was likely to be in an unsound financial position or may be involved in a financial crime. The papers revealed that the appointment of the Statutory Manager was later confirmed by Justice Gabriel Komboni April 20, 2020. Subsequently, the companies in the Group were then liquidated and consolidated under the estate of BFM.
