The writing has been on the wall for some time now, and hence it comes as little surprise that the Securities and Exchange Commission (SEC) has suspended the gold trading operations of Menzgold Ghana Limited.
According to SEC, Menzgold has been dealing in the purchase and deposit of gold collectibles from the public and issuing contracts with guaranteed return to clients, without a valid licence from the Commission.
SEC says this contravenes section 109 of Act 929, with consequences under section 2016 (1) of the same Act. In spite of multiple warnings, Menzgold persisted and sold gold to unauthorised persons.
Additionally, SEC also called on the Minerals Commission which licenced the operations of Menzgold to “call Menzgold to order and direct it to conduct its business in accordance with the licence issued it by MINCOM”.
Menzgold has courted controversy by persistently calling the central bank’s bluff – which had also expressed grave concern about the operations of the gold trader, but was berated and ignored as not having the authority to intervene.
Now the die is cast and SEC has directed the company “to shut down immediately the business of trading in gold collectibles with guaranteed returns to clients, which constitutes dealing in securities with neither the necessary licence nor disclosures authorised by the SEC”.
We are told the CEO of Menzgold, Nana Appiah Mensah, has apologised to the BoG and that the firm has also urged its customers to remain calm in spite of the directive from SEC. Menzgold says it has referred the matter to its lawyers for the right action to be taken.
We are therefore prevented from commenting too deeply on the matter as it is before the law. As expected, there is quite a bit of anguish among customers of Menzgold, who we learn are trooping to withdraw whatever deposits they might have had with the gold trader.
SEC has asserted the fact that Menzgold is licenced only to purchase and export gold from licenced sellers, but it sells and purchases gold collectibles from the general public through its agent Brew Marketing.
Well, while the issues are being ironed-out by the regulator, it is prudent for businesses to operate within the specified areas assigned in their registration documents; then they will not be subjected to legal probes.
We hope the issues can be resolved quickly and customers are not unduly affected.