A private legal practitioner says the central bank may have infringed on the right of Menzgold Investment Company when its Second Deputy Governor went public with assumptions that the gold dealer's operations flout banking regulations without supporting evidence.
Yaw Oppong, who is also a law lecturer at the Central Univerity College, said although the Bank of Ghana has been given enormous powers to prosecute companies that flout any of the banking regulations, it needed to gather credible evidence before coming out with potentially damaging information about any company it thinks is breaking the law.
“If Menzbank is licensed to deal in gold and they have veered into some banking business, you [Bank of Ghana] don’t just don’t give notice. And if you didn’t have sufficient information, you make sure you investigate because otherwise, you may also be infringing on the right of the company,” he said on Newsfile, a news analysis programme that aired on Joy FM and Multi TV on Saturday.
The gold dealership earned negative publicity when Dr Johnson Asiamah, appearing before the Public Accounts Committee (PAC) of Parliament on Tuesday, August 8, 2017, said that Ghanaians risk being scammed if they deposit money with the company because it has not licensed to do so.
“Only last week we caused a publication in the newspapers about Menzgold to the effect that we have not licensed them to accept deposits, because, to accept deposits, you will need a license from the Bank of Ghana. We have not licensed them and hence if you go ahead to do any business with them, it is at your own risk,” Dr Asiamah had told Parliament.
However, reacting to the BoG claims Menzgold told Joy News that it does not take deposits, insisting that it is only a gold dealing firm.
“We buy gold and sell gold. All our operations or whatever we do in our outlet is directly linked to the sale and purchase of gold,” the firm said.
Menzgold clarified further that it has clearance from the Minerals Commission to deal in gold.
“We are not a micro finance, neither are we a financial institution and so we do not take deposits in any way,” Menzgold reiterated.
Despite Menzgold’s intervention, public sentiments about the company turned suspicious, with many liking the company to DKM Finance – a microfinance company that earned notoriety for defrauding depositors.
OccupyGhana, a pressure group led by renowned lawyers and business owners, issued a strongly-worded press statement demanding an immediate probe into the activities of Menzgold from the Bank of Ghana, the Securities & Exchange Commission and Minerals Commission.
“Against the background of the recent financial ruin visited upon some Ghanaians by the DKM disaster, we are concerned whether the claim of dealing in gold is a guise for (i) deposit-taking by a private company in breach of the Companies Act, 1963 (Act 179); (ii) unlicensed deposit-taking in breach of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930),; (iii) unauthorised securities transactions in breach of the Securities Industry Act, 2016 (Act 929); or (iv) worse still, a criminal ‘Pyramid’ or ‘Ponzi’ Scheme,” OccupyGhana stated.
Speaking on Newsfile Saturday, Yaw Oppong suggests that the central bank fuelled the suspicion by OccupyGhana and other members of the public.
“If they [Bank of Ghana] think don’t have enough information, should tell us. But also the law gives them the power to ensure that these people are also prosecuted at least through the Attorney-General. Why didn’t give the information to the Attorney-General? If we are not careful, this sort of thing can end in the payment of needless judgement debt,” Yaw Oppong warned.
Other panellists on the programme also backed Yaw Oppong's views on the matter. Watch more in the video below.
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