Nana Appiah Mensah
Embattled gold dealership firm, Menzgold Ghana Limited, has indicated that the temporary halt on its collectibles and any new business related to its gold vault market remain in place as it takes steps to address issues with the Securities and Exchange Commission (SEC).
The company on September 13, 2018, temporarily halted its collectibles and other business related to its gold vault market following a directive from the regulator- SEC.
The gold dealership firm was expecting to resume normal work by close of yesterday, September 19, 2018, and called on its customers to show cooperation as it takes steps to resolve the issues.
A press release issued by management of the company on Thursday, September 13, 2018, said “following the notice from the Securities and Exchange Commission of Ghana issued on the 7th day of September, 2018, the management of Menzgold Ghana Limited, in its bid to bring some finality to the issues once and for all, has decided to place a temporary halt on all extra value payments and any new business related to our gold vault market.”
It explained “the halt takes effect from Thursday, 13th September, and will be in place for six days by which time we believe all pending issues related to the gold vault market product would have been ironed out.
“We are certain this halt would not go beyond the 19th day of September, 2018, and we would, as usual, count on your (clients) understanding and cooperation during this period. Any inconvenience caused is deeply regretted.”
But the company has now issued another statement indicating that the temporary halt remains in place until September 28, 2018, “to enable us reach a useful conclusion with the Securities and Exchange Commission (SEC)”.
The statement regretted any inconveniences caused by factors beyond their control and thanked customers for their support and cooperation.
Meanwhile, officials of Menzgold Ghana Limited and the SEC will meet today in furtherance of difficulties associated with the SEC directive to shut down its operations with an immediate effect.
Background
SEC directed the company to stop trading in gold collectibles in a letter dated September 7, 2018.
That was after SEC had met management of Menzgold in August 2018.
On August 27, 2018, SEC gave Menzgold two days to respond to its queries but the gold dealership company, in a letter dated August 29, 2018 to SEC, asked for a two-week extension.
Menzgold previously called the bluff of Bank of Ghana (BoG) and vowed not to adhere to the Commission’s directive.
Lawyer for Menzgold Kwame Akuffo wrote to SEC, saying “purported directive to shut down or suspend its operations is untenable and it’s unable to comply.
Menzgold, however, was of the view that SEC was silent about its request for an extension.
The Commission revealed 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 (issuance of gold-backed depository notes to the public) it is engaging in “under Act 929 without a valid licence issued by SEC contrary to Section 109 of Act 929 with consequences under section 206 (1) of the same act.”
Menzgold initially described the leak to the media of a confidential meeting as distasteful and an affront to cooperation.
The company for the second time decided to eat the humble pie, explaining that “this decision, though very unfavourable to us, has been informed by our commitment to the rule of law, absolute respect for state agents, agencies and total submission to the state.”
BY Gibril Abdul Razak