Nana Appiah Mensah
Menzgold Ghana Limited has temporarily halted its collectables and any new business related to its gold vault market with immediate effect due to the directive from the Securities and Exchange Commission (SEC).
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 that “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.”
Background
SEC directed the company to stop trading in gold collectables 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 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 markets activity (issuance of gold-backed depository notes to the public) 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 Melvin Tarlue