General News of Thursday, 22 November 2018
The Minister of Finance, Mr Ken Ofori-Atta has made it clear that the government was not under any legal obligation to pay persons whose moneys have been locked up in Menzgold. Attributing the decision of people to invest in the company as pure greed, Mr Ofori-Atta revealed that some of the affected persons were members of staff of BoG, Ministry of Finance and the military and other reputable institutions across the country.
Delivering a speech at the third capital market conference and 20th-anniversary commemoration of the Securities and Exchange Commission (SEC), he said the company had no license from requisite state bodies to operate.
He said much as the issue was disturbing, the government was not obligated to investors of the gold dealership which was offering as much as 120 per cent profit per annum.
Mr Ofori-Atta was categorical in stating that customers had invested their monies in Menzgold at their own peril.
He said “as we try to clean up the financial services centre, I know the SEC has come down hard, strong and justifiably on Menzgold. But the issue with a company of Menzgolld, it has become an issue of greed as a people and our own behaviour, when we are so clear as educated as we might be that when we went there, there was no license.”
“I think it is not in the place of government to fund or get your money back for you. It was an obvious trap that you went into. Maybe we as an industry should also push the whole issue of education and empowerment so that people do not fall prey to that,” Mr Ofori-Atta continued amidst cheers and resounding applause from the audience.
The Securities and Exchange Commission (SEC) on September 12, 2018 directed gold trading firm Menzgold Ghana Limited to shut down their investment operations with immediate effect for contravening the Securities Industry Act, 2016 (Act 929).
The SEC order also warned Menzgold to halt advertising their investment business and desist from creating new contracts with depositors.
According to a letter addressed to the Menzgold CEO, Nana Appiah Mensah by the SEC investigations conducted by the regulator found that Menzgold’s business which involved the purchase/deposit of gold from the public and contracts issued with guaranteed returns with clients was a capital market activity which could not be conducted without a valid license issued by the SEC.
The letter dated September 7 and signed by Paul Ababio, the Deputy Director-General of the SEC, warned that the failure of Menzgold to comply with the directive will lead to the SEC employing other relevant measures under the law to enforce compliance.
“The SEC has keenly followed and investigated the operations of Menzgold Ghana Ltd (hereinafter referred to as Menzgold) since 2017 including paying a working visit to the head office of the company on 23rd August, 2018 by some officials of the SEC to further understand the operations of the company where a meeting was held with Mr.Nana Yaw Offei, Commercial Manager and Rev. Derek Akubia, an adviser to the CEO,” a part of the letter reads..
“The interactions with Mr. Offei and Rev. Derek Akubia confirmed to the SEC the view that the aspect of Menzgold’s business which involve the purchase/deposit of gold collectibles from the public and contracts issued with guaranteed returns with clients is a capital markets activity (issuance of gold backed depository notes to the public) under ACT 929 without a valid license issued by SEC contrary to section 109 of Act 929 with consequences under section 2016 (I) of the same.”
The SEC said Menzgold’s collaboration during their investigations does not make aspects of their operations any less illegal. It went on to describe Menzgold’s business operations as a threat to unsuspecting and uninformed investors.