General News of Thursday, 27 September 2018
The Securities and Exchange Commission (SEC), has indicated that it is yet to hear from gold trading company Menzgold Ghana Limited after it ordered the suspension of its gold trading business.
On September 12, 2018, SEC asked Menzgold to suspend its gold trading operations with the public.
According to the SEC, Menzgold has been dealing in the purchase and deposit of gold collectibles from the public and issuing contracts with guaranteed returns with clients, without a valid license from the Commission.
This, the SEC said, is in contravention of “section 109 of Act 929 with consequences under section 2016 (I) of the same Act.”
But speaking on an Accra based radio station, Citi Fm on Wednesday, the Deputy Director-General at SEC, Mr Paul Ababio revealed that information flow from the gold dealership firm to enable the two parties reach a favourable consensus has not been smooth.
“We may have finished with our investigation but actual implementation of the results of that investigation is also subject to their willingness to cooperate because we requested for information in August; we have sat with their lawyers with a few back and forth, and we still haven’t received information from them. So if we have the information, one might say within a matter of weeks we should have some closure; then the question now becomes the action items arriving from that determination.”
Mr. Ababio further explained that, its directive to Menzgold to halt the gold trading operation is a measure to rather protect unsuspecting investors and not in any way to collapse the company,
He added that, Menzgold needs to disclose fully, all relevant data to enable the Commission streamline their operations.
“We are opened to getting information from them, we don’t act without certain basis. We are supporters of entrepreneurs. The key question is what kind of promises you are making and do you have the support for those promises and if a regulator is engaging you should be communicating. We are a government entity; we are not out there to destroy. We are out to protect investors to ensure that they have the level of information if you are taking risks. What are the risks involved in the activities that is being offered. There is the need for an informed market place.”
Meanwhile, Menzgold Ghana Limited has temporarily halted operations following the directive from the Securities and Exchange Commission (SEC).
Earlier, Menzgold said it was still open for business because it believed SEC’s letter was leaked and distasteful.
But the company in a statement said it took the decision to help bring some finality to its seemingly unending woes.
“Following the notice from the Securities and Exchange Commission of Ghana issued on the 7thday of September, 2018, the Management of Menzgold Ghana limited in its bid to bring some finality to the issues once and for all has decided to place a temporary halt on all extra value payments and any new business related to our Gold vault market,” a statement from management of Menzgold stated.
Subsequently, the company said it’s unable to pay its customers dividends on their gold investments due to the action taken against it by the Commission.