SEC Orders Menzgold to Shut Down Gold Operations

The Securities and Exchange Commission (SEC) has ordered gold trading company Menzgold Ghana Limited to shut down their gold operations with immediate effect for contravening the Securities Industry Act, 2016 (Act 929).

The SEC order also warned Menzgold to halt advertising of their investment business and desist from creating new contracts with depositors.

In the letter dates 3rd and 7th September 2018 respectively, signed by Deputy Director General, Paul Ababio, sighted by thepublisheronline.com, the SEC indicates:

“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 further explained that, “It is our expectation that being your licencee, MINCOM, would call Menzgold to order and direct it to conduct its business in accordance with the licence issued to it by MINCOM”

However, the SEC’s directive does not affect Menzgold’s other business dealings such as assaying, purchasing gold from small-scale miners and export of gold which is regulated by the Minerals Commission.

“The SEC has keenly followed and investigated the operations of Menzgold Ghana Ltd (hereinafter referred to as Menzgold) since 2017 including paying a working visit to the head office of the company on 23rd August, 2018 by some officials of the SEC to further understand the operations of the company where a meeting was held with Mr. Nana Yaw Offei, Commercial Manager and Rev. Derek Akubia, an adviser to the CEO,” a part of the letter reads.

The current decision by the Securities and Exchange Commission comes after several warnings from the Bank of Ghana to Menzgold to stop trading in gold without a licence.

The central bank, on 7 August 2018, issued a public notice, the fourth of many, that it was in discussions with relevant regulatory authorities to sanction Menzgold for engaging in “solicitation, receipt of money or investment and the payment of dividends or returns to its clients” without a licence to do so.

Also, The Securities and Exchange Commission (SEC) in October 2017 announced that Menzgold Ghana Limited, an investment company has not been licensed to operate in the capital markets.

The central bank cautioned the general public that anyone who transacts “any of the above-mentioned businesses with Menzgold Ghana Company Limited does so at his or her own risk,” and the Bank of Ghana will not be liable in the event of loss of investments of deposits.

Nana Appiah Mensah, owner of the gold-buying firm, has denied on a number of occasions that his company takes deposits.

Just last week, 3 September 2018, some clients of the gold-trading firm converged on its premises in fury to demand their “extra values” on their gold investment which they said had delayed unduly, since the payment was being streamlined through the banks, instead of the over-the-counter status quo.