SEC shuts down Menzgold but company says it’s still open for business

The Securities and Exchange Commission (SEC) has ordered gold trading firm, Menzgold Ghana Limited, to suspend operations with the public with immediate effect.

In a letter dated September 7, 2018 SEC said it had thoroughly investigated the activities of Menzgold and had found that, the Nana Appiah Mensah-owned firm did not have the license to trade in gold collectibles from the public.

The statement explained that interactions with representatives of Menzgold confirmed to SEC the view that the aspect of Menzgold’s business, which involved purchase and deposit of gold collectibles and guaranteed returns was a capital market activity under Act 929 without a valid license issued by SEC which contravenes the law.

The statement added that subsequent requests had been made by SEC to Menzgold’s lawyers to furnish SEC with specific detailed information on the operations of the firm.

The supply of those documents, however, does not clear Menzgold to continue the mentioned aspects of Menzgold’s business.

“That aspect poses a threat to unsuspecting and uninformed investors,” SEC noted.

SEC also ordered that no new contracts of such should be created and all advertisement on same should cease.

It added that failure to comply would force SEC to enforce the directive through alternative means.

Menzgold, the statement however, said was free to continue purchasing gold from small-scale miners and exporting same.

Meanwhile, the Gold-trading firm yesterday described as unfortunate, the letter from SEC directing the company to stop forthwith, all investment trading in gold without license.

Menzgold described the letter as “needless, in bad faith” and “distasteful,” as they were cooperating with the commission to arrive at a cordial resolution to matters relating to their operations.

Reacting to the letter, the management of Menzgold, in a statement, said: “It is very unfortunate that a letter relating to business discussions between the organisation and the Securities and Exchange Commission has found its way to the public.

“Menzgold, in the wake of the Bank of Ghana’s warning to the public to desist from doing business with the organisation, availed itself of all relevant state institutions for various consultations and dialogues designed to arrive at a productive and sustainable resolution.

“One of such organisations is the Securities and Exchange Commission with whom we have been hopeful of arriving at a cordial resolution to all matters, if any, then we submit to its standards, if we must. 
“This needless leak believed to be coming from the Securities and Exchange Commission is, to say the least, in very bad faith and distasteful; as it defeats our confidence in the body and an affront to cooperation. We totally condemn it!”

Management of Menzgold said they had referred the matter to their lawyers for the right action to be taken and assured their customers that neither Menzgold as a business entity nor any of its products has been shut down.

“Your gold trades are very safe and business is proceeding as usual,” the company assured.

Head of Communications of Menzgold Nana Offei, told journalists that though the company had   received a copy of the letter from SEC, the firm was still operating.

 

 

 

Story: Kofi OWUSU TAWIAH

Writer’s email: kofi.tawiah@todaygh.com

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