General News of Wed, 12 Sep 201833
Give Menzgold free hand to operate - Allotey Jacobs
Staunch member of the opposition National Democratic Congress, Allotey Jacobs says the Securities and Exchange Commission of Ghana (SEC) erred in issuing the directive for gold dealership company, Menzgold to immediately cease operations.
According to Allotey Jacobs, the directive would not only affect Menzgold but other investments firms in the financial sector.
Panic withdrawals hit Menzgold on Wednesday after customers besieged offices of the company following SEC Ghana’s directive for the company to suspend trading.
“I am shocked at the decision to close down Menzgold because this is a young man trying to be innovative and if there’s something wrong with what he is doing, it is just proper to engage him and see the way forward.
“The financial sector is already suffering so we must be careful as a nation in dealing with such matters,” Allotey Jacobs added.
Menzgold’s business operation has come under scrutiny for what many believe is a flagrant abuse of the laws regulating deposit-taking firms.
The company essentially offers an investor the opportunity to make huge returns – some 7% every month – on whatever has been invested.
Menzgold converts the cash an investor puts into the scheme into equivalent gold tokens.
These tokens are then deposited with the dealership for the monthly interests to kick in.
The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) have faulted the company’s activities, while a section of the public think the business module resembles a Ponzi Scheme.
But the Menzgold has consistently fought back accusing officials of the BoG and industry watchers of witch-hunt.
In a letter dated 3rd September, 2018 and signed by Deputy Director General, Paul Ababio, the SEC said: “In September 2017, the SEC issued a public notice indicating that it does not regulate Menzgold.
“The SEC began further investigations into the activities of Menzgold in July 2018. In August 2018, the Commission called for an inter-sectoral meeting that involved the Minerals Commission, Bank of Ghana and the Securities and Exchange Commission. The Meeting concluded that it is evident Menzgold’s activities appear to go beyond the mandate authorised in its licence”.
The SEC said: “It is our expectation that being your licensee, MINCOM, would call Menzgold to order and direct it to conduct its business in accordance with the licence issued to it by MINCOM."