Business General

SEC Ghana shuts down Menzgold

Ghanaian Gold dealership firm, Menzgold has been directed by the Securities and Exchange Commission Ghana (SEC) to immediately cease operations, has gathered.

Though information is still scanty, is reliably informed that, a letter has been written to the company to refund monies of depositors or face the full wrath of the law.

In the  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 licencee, MINCOM, would call Menzgold to order and direct it to conduct its business in accordance with the licence issued to it by MINCOM”.

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.

The PMMC has also said the licence granted Menzgold does not allow it to buy gold from just anybody but small-scale miners for export.

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