Some stockbrokers have warned shareholders of SIC Insurance Company Limited against trading off their shares in the midst of the company’s challenges. SIC has been hit with a number of managerial and financial challenges.
This comes after a non-bank financial institution, Ivory Finance, secured a court order, empowering them to access SIC’s accounts to take out all monies owed them.
SIC guaranteed an Italconstruct International Limited project, but the company has since been unable to pay its lenders, Ivory Finance which later secured the garnishee order.
Following the development , the former MD of SIC Insurance, Mrs. Doris Awo Nkani has been asked to step down and the company now has an Acting Managing Director, Kwei Mensah Ashidam.
Two top executives of SIC, the Deputy Managing Director in charge of Finance and Administration Musa Abdulai and the Head of Finance and Accounting Ken Acolatse were also implicated in the alleged theft of 1.1 million dollars and 700,000 cedis respectively early on.
The share price of the state insurer has been tumbling following the arrest of two directors for embezzling funds and the subsequent interdiction and dismissal of the former MD, Doris Awo Nkani.
Head of EDC Stockbrokers, Mahama Iddrisu told Citi Business News, even though the market does not swiftly react to stock market issues, shareholders must not rush in trading off their shares in SIC.
‘’For people who are looking at medium to long term investments, this is not the time to sell and for those who have held their investments for a long time, they will probably be enjoying their gains , some people even bought it at IPO and they might think should they sell it above IPO price , they will have already made gains’’.
Between August 2014 and January 2015, the share price of SIC fell from 40 to 25 pesewas. As at January 2015, total shares traded hit around 10,000 as compared to 12, 600 in August 2014 alone.
‘’We have seen some depreciation of the price over the past weeks and that means the moment there is a dump of shares the interplay of demand determine the price and people will not want to buy SIC shares now at market price’’ Mahama Iddrisu observed.
Meanwhile the Union of Industry, Commerce and Finance Workers (UNICOF) of Ghana, has challenged the current management of SIC to as a matter of urgency institute policies that will boost confidence in the state insurer.
Deputy General Secretary of UNICOF, John Amegashie told Citi Business News the outstanding issues in the company if not addressed promptly will affect the general operations of the state insurer.
‘’As a service industry, confidence of customers towards the organization is very paramount and should not be compromised with and if the company cannot operate and have its accounts to pay claims, then you know at the end of the day, they will be losing most of their customers and that will invariably affect SIC’s operations’’.
According to Mr Amegashie, the Union has expressed concerns in the company because it has members who are employees of SIC.
‘The company needs to look at the cardinal principles and policies of the organization because we have been told they could not adhere to some of the policies underlying their operations and that has led to SIC’s current situation’’ Mr Amegashie noted.
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