The ongoing liquidation of YUP, the payment services subsidiary of multinational banking giant Société Générale, has raised critical questions about how liquidation rules affect foreign investors’ money in Central African startups. In this case, the focus is on YUP Cameroun, a fintech company that held a registered capital of over XAF 2.8 billion since 2017.

Liquidator Manfred Penda is actively reaching out to creditors, urging them to claim their dues following the provisions of Article 76 and related OHADA (Organisation for the Harmonisation of Business Law in Africa) regulations. These regulations specifically pertain to the Uniform Act on Insolvency Proceedings and the Settlement of the Liabilities of Commercial Companies and Others.

According to Article 76, the decision to open liquidation renders due debts only in the case of asset liquidation and pertains solely to the debtor. For debts expressed in foreign currencies, they are to be converted into the currency of the place where the decision to liquidate the assets was pronounced, based on the exchange rate on the date of this decision.

Liquidator Penda has issued a call to YUP Cameroun’s creditors to submit all supporting documents for their claims at the headquarters of Société Générale Cameroun in Douala Bonanjo. The specified information must be enclosed in a sealed envelope, with acknowledgment upon receipt. The validity period for claims is sixty (60) days for creditors within the national territory, extending to ninety (90) days for those outside the national territory.

Notably, certain entities such as the Treasury, Customs Administration, and Social Security and Welfare Organizations are assured acceptance of claims despite any recalls and adjustments. Additionally, claims arising from employment or apprenticeship contracts are safeguarded by the “Super Privilege of Employees.” Defaulting creditors can only invoke a court decision after the prescribed deadlines.

This development follows Société Générale’s prior announcement regarding the discontinuation of its electronic money issuance service, of which YUP Cameroun was a distributor. The decision was attributed to the failure of the YUP electronic money service to create a viable model. Société Générale expressed its commitment to refocusing activities on banking services in Africa, particularly in Cameroon, while ensuring a supportive transition period for clients and partners.

The French bank has pledged to implement a transitional plan to assist clients and partners during this period. Over the next three months, efforts will be made to facilitate the recovery of assets by customers under favorable conditions.

As the reimbursement procedure for various debts claimed by the electronic money distribution subsidiary commences, attention is drawn to the broader implications of liquidation regulations on foreign investors’ interests in Central African startups. These regulations, while designed to streamline the liquidation process and protect creditors’ rights, may present challenges for foreign investors seeking to recoup their investments. The conversion of foreign currency debts into the local currency and the prioritization of certain claims could potentially impact the recovery prospects for foreign investors. Consequently, such regulatory frameworks underscore the importance of thorough due diligence and risk assessment for foreign investors engaging in Central African markets.