By: Michael Eli Dokosi
The Chief Executive Officer of gold trading firm, Menzgold has apologised to depositors for the inconveniences they’ve had to endure for the past two months due to the conflict the firm has had with the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC).
Speaking on Zylofon FM via phone to address anxious depositors who are looking forward to receive their owed monthly values or principal, Nana Appiah Mensah expressed delight that some of the clients are keeping faith in him and the business noting “for 5 years, Menzgold paid monthly values to depositors without a hitch till the BoG and SEC’s intervention, reason for which they wish to continue to do business.”
According to Mr. Mensah although the issue of Menzgold acting beyond its remit as alleged by the two state agencies is before the court and wouldn’t wish to delve deeply, his team has had to fast track moving the business from offline to online.
“Depositors are urged to visit the various Menzgold branches they initiated their transaction at to pick forms and provide their personal details, amount of gold purchased, owed extra values among others. When that is done, those who wish to get their principal and wouldn’t wish to continue dealing with Menzgold will be paid 15% of their principal from November 9. Those who are owed extra values but wish to continue trading will be migrated to the online portal (Menzgold Global Market-Online) where their values will be paid through a bank of their choice with notice given on their phones.”
He said with the online migration, payments can swiftly be made so that by December new depositors can start receiving their monthly values adding “with payment effected through the banks, the fear of the banks about flight of funds to Menzgold will also be contained.”
Asked if Menzgold could survive and thrive, Nana Appiah Mensah noted, on the company’s part they are doing everything possible to end the impasse with BOG and Sec as well as interacting with government as the company’s activities affect a good number of Ghanaians.
He further submitted: “Myself, my cousins, mum, siblings and friends have all benefited from Menzgold as we are also depositors. If all the gold depositors retrieved their gold at a go, there wouldn’t be any Menzgold.”
“In late 2017 and having done the gold trading successfully for 4 years, we decided to open branches abroad and enter international markets. We went to Spain undergoing rigorous checks spanning 9 months. We opened operations in the UK as well as Nigeria and had begun the process to open in the US, that’s when the BoG and SEC intervention happened leaving the U.S project to stall. With the US, there was need for brand association so Becca was sent to break the ice with the BET folks and in 2018, I had to be in LA to support the awards show with our specially designed gold medallions,” Mr. Mensah told show host; Kame Ampadu.
How did the Central Bank and SEC’s issue with Menzgold begin?
According to Nana Appiah Mensah, the two agencies held that aspects of its gold trading business required documentation and licensing from them but also reckoning that its business module was not directly under the two agencies supervisory wing, there was breakdown in talks leading to the SEC asking it to halt taking in new deposits resulting in the market becoming volatile with some demanding to terminate their contract and withdraw their deposits.
Appiah Mensah also submitted having gone to court, Menzgold could have waited to hear the court’s verdict before effecting payment but being sensitive to clients need, decided to do a schedule and pull money from other sources to effect payment but with apprehension and unease in the system high and a rush from depositors who heard payment had begun, payment had to be suspended till now that the online system is up.
The Bank of Ghana had begun issuing notices to the general public in the dailies to desist from dealing with Menzgold because it was not authorised to take deposits further holding that the gold trading entity had gone beyond its remit of buying gold from small scale miners as well exporting gold. The Securities and Exchange Commission would also begin warning the public demanding Menzgold submit its operations to further regulatory checks.
In one of the SEC’s ads, it warned that “Menzgold had neither been licensed nor their adverts sanctioned by the Securities and Exchange Commission (SEC) to carry out any activity in the capital market.”
The notice also asserted that Menzgold was not a SEC-regulated entity because its operations contravene Section 3 (c) of the Securities Industries Act, 2016 (Act 929) which deals with the registration, licensing, authorisation and regulation of entities in the securities market.
The incessant warnings begun taking effect with some depositors rushing to the various Menzgold branches to demand their deposits or terminate the contract, a move which the gold house claims has put severe stress on its operations.
It’s emerged that although Menzgold had been granted a “license to buy and export gold, its license from the Minerals Commission and the Ministry of Lands and Natural Resources had expired.
It remains to be seen what BoG and SEC’s next move will be given Menzgold seeks to move its operations from offline to online in a move critics claim is to circumvent the system.