SEC orders Menzgold to suspend ‘illegal’ trading operations
Menzgold Ghana Limited has been asked to suspend its gold trading operations with the public by the Securities and Exchange Commission (SEC).
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 says, is in contravention of “section 109 of Act 929 with consequences under section 2016 (I) of the same Act.”
The company has however been cleared to continue its “other businesses of assaying, purchasing gold from small-scale miners and export of gold.”
The SEC said in its statement, dated September 7, that it has been investigating Menzgold since 2017 but paid a working visit to the company on August 23, 2018 where they met with the Commercial Manager, Nana Yaw Offei and an adviser to the company’s CEO, Derek Akubia.
SEC stated that despite being licensed to only purchase and export gold from licensed sellers also sells and purchases gold collectibles from the general public through its agent, Brew Marketing.
The Commission has since requested for “detailed information” on the activities of the company which the lawyers of Menzgold have agreed to provide within 14 days.
The SEC, however, believes that this notwithstanding, the company’s activities constitute an illegality and are “a threat to unsuspecting and uninformed investors.”
“Accordingly, the SEC hereby directs Menzgold Company Ltd to shut down immediately the business of trading in gold collectibles with guaranteed returns to clients which constitutes, in essence, dealing in securities with neither the necessary license nor disclosures authorised by the SEC. No new contracts should be created and all advertising of the investment business halted with immediate effect.”
The statement from the SEC added that failure by Menzgold to comply with the directive “will lead to the SEC employing other relevant measures under the law to enforce compliance.”
The Commission also called on the Minerals Commission which licensed the operations of the gold trading company to “call Menzgold to order and direct it to conduct its business in accordance with the licenseissued to it by MINCOM”
Menzgold Ghana Limited was in 2017 cautioned against its persistent sale of gold to unauthorized persons.
The Minerals Commission in a letter to the company had also given it 10 days to correct its “misrepresentations” in the media concerning its operations and license.
The company, which has recently courted controversy over its operations, was licensed solely to buy gold in Ghana and export to other countries.
However, the Minerals Commission observed that the company was misinterpreting the authority granted it by its license by selling gold to the general public who are not licensed to buy gold.
The Economic and Organised Crime Office (EOCO) subsequently invited the Chief Executive Officer Menzgold Ghana Company Limited, Nana Appiah Mensah for questioning.
This development follows public notice by the Bank of Ghana (BoG) indicating that it was moving against Menzgold, which is suspected to be carrying out unlawful transactions by taking deposits.
CEO retreats; apologises for mocking BoG
Meanwhile,the Chief Executive Officer of Menzgold Ghana Company Limited, Nana Appiah Mensah, has apologized to the Bank of Ghana (BoG) for mocking its warning to the company over perceived unlawful operations.
In a post on Social Media, Nana Appiah Mensah said Menzgold is currently cooperating with the BoG and other state agencies.