General News of Thursday, 18 October 2018
Vice President of policy think-tank MANI Africa, Kofi Bentil, has warned government against using taxpayers’ money to pay off people who lose their investments through ponzi schemes or illegal activities.
Speaking at an economic dialogue organised by Media General, he argued the government has no responsibility whatsoever, to step in when such ponzi schemes either collapse or run away with people’s investment.
“Government has no responsibility, legal or moral, to pay citizens for losses incurred as a result of engaging in illegal activity,” he stated.
The forum is themed “Investment in the Face of Ponzi Schemes: How Do we Clean the Mess?”.
A ponzi scheme is a form of fraud in which the unsuspecting public is tricked to invest in a non-existent investment scheme, with the promise of offering them ridiculous percentage as their investment returns.
In order to build the scheme, the fraudsters pay earlier investors using funds from new investors, which entice more people to join.
About 10 of such ponzi schemes have operated and either collapsed or owners ran away with huge sums of money being the investment of the unsuspecting public.
The canker has over the years caused loss of thousands of cedis to the public while others have lost their lives as a result.
In the recent case of DKM, the government stepped in to liquidate the company after which it paid off investors.
Again in the banking crisis that rocked the country, government spent 13 billion of taxpayers’ money to liquidate seven banks in a bid to safeguard the investment and savings of thousands of Ghanaians, President Nana Akufo-Addo revealed two weeks ago.
Mr. Bentil noted some Ghanaians have formed what he termed as “emotional notion” based on nothing, that once someone loses his investment in an illegal activity such as ponzi schemes, the government ought to step in to pay out their investment principal.
“There is not such responsibility,” he pointed out.
According to him, politicians are partly to be blamed for such notion because “in certain situations I’m aware the government paid some money… One of these days, somebody should sue them for wasting our money”.
He advised that people begin to think hard about such ponzi schemes which disguise as genuine investment firms offering mouthwatering returns on investments.
“You need to know that you don’t have any protection,” he advised.