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SEC ask Menzgold to 'shut down' illegal operations
The Securities and Exchange Commission in a letter said “no new contracts should be created and all advertising of the investment business halted with immediate effect.”
In a letter dated September 7, 2018, which was signed by the Deputy Director General of SEC, Paul Ababio said that “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 disclosure authorised by the SEC.”
The letter added that “no new contracts should be created and all advertising of the investment business halted with immediate effect.”
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Mr Ababio in the letter said that they visited the head office of Menzgold Ghana on August 23, 2018, to further understand the operations of the company.
After the meeting between SEC and Menzgold officials, it was confirmed to SEC that “the aspect of Menzgold’s business which involves the purchase/deposit of gold collectibles from the public and contracts issued with guaranteed returns with clients is a capital market activity under Act 929 without a valid license issued by SEC contrary to section 109 of Act 929 with consequences under section 206 (1) of the same Act."
In August this year, the Bank of Ghana issued a public notice cautioning the general public to desist from depositing cash at Menzgold.
It said the company has no authority to engage in what it says are the “solicitation, receipt of money or investment and the payment of dividends or returns to its clients.”
The central bank maintained that Menzgold is in breach of section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
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Meanwhile, the BoG said that it will not be held responsible if there is any loss of investment.
Menzgold’s response
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But the SEC has now asked the company to stop business immediately.
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