The Securities and Exchange Commission (SEC) has directed Menzgold Ghana Company, a gold-trading firm, to halt its operations including trading in gold without license.
The shutting of the multimillion cedis company comes a month after the Bank of Ghana warned Ghanaians over the activities of the firm.
It had warned Menzgold over the “solicitation, receipt of money or investment and the payment of dividends or returns to its clients” contrary to the laws.
In a letter dated September 3, 2018 and signed by Deputy Director- General of SEC, Paul Ababio, indicated that the company’s activities had gone “beyond the mandate authorised in its licence” after the Commission had investigated it.
The letter addressed to the CEO of Menzgold, Nana Appiah Mensah said “In September 2017, the SEC issued a public notice indicating that it does not regulate Menzgold.”
The SEC also said after “further investigations” in July 2018, the Commission called for an inter-sectoral meeting in August 2018 that involved the Minerals Commission, Bank of Ghana and the Securities and Exchange Commission which concluded that Menzgold’s trade had gone beyond what it was mandated to trade in.
“It is our expectation that being your licencee, MINCOM, would call Menzgold to order and direct it to conduct its business in accordance with the licence issued to it by MINCOM,” SEC said in its letter.
Menzgold And BoG Scuffle
It will be recalled that the Bank of Ghana (BoG), through the Secretary to its Governor, Mrs Caroline Otoo cautioned Menzgold to desist from taking deposits and also stop making payments of dividends. The BoG went on to caution the public to deposit money with the firm at their own risk.
Nana Appiah Mensah, CEO of Menzgold.
The Central Bank said “…in spite of the caution to Menzgold Ghana Company Limited to desist from solicitation, receipt of money and payment of dividends to its clients, the company is still engaged in these activities contrary to section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).”
The company in a sharp rebuttal asked its clients to ignore the BoG’s caution. Nana Appiah Mensah, the CEO of Menzgold denied claims of taking deposits from clients and referred to the authorities of the Central Bank as “jokers.”
Barely a month after the warning from BoG, some clients started mounting pressure on the gold-buying firm, threatening to take their deposits.
Hundreds of clients were seen thronging the Dzrwulu/N1 Highway side branch of Menzgold on Monday, September 10, 2018 to collect their withdrawals.
Some of the frustrated clients said their time was due to be paid their profits after three months of deposit, but the company asked them to exercise patience for a while as they pay them their dividends through some selected banks.
The inability of the clients to withdraw their deposits without any hustle had sent a signal to other clients who have since last week been invading other branches of Menzgold to withdraw their monies accrued from their gold investments.
The company is expected to have a tough time as it is trying to calm nerves of their clients who have millions of cedis deposited at the gold-buying firm.
Efforts to reach authorities of Menzgold for their reaction have proven futile.
Story by: Henryson Okrah/Ghana/mypowerfmonline.com