Menzgold sues BoG, SEC for poking noses where it does not belong

Menzgold sues BoG, SEC for poking noses where it does not belong
Source: Ghana|Myjoyonline.com|Nathan Gadugah
Date: 27-09-2018 Time: 02:09:49:pm
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Menzgold has dragged the Bank of Ghana and the Securities and Exchange Commission to court accusing the two statutory institutions of hurting its business.

The gold dealers in a suit filed, Thursday, a copy of which has been intercepted by Myjoyonline.com is asking the court to slap aggravated damages on the two institutions.

The company insists the notices given by BoG and SEC have been nothing more than an abuse of office by the two institutions and which have caused considerable reputational damage to the company.

The plaintiff wants an order of the court to restrain the two bodies from unnecessarily interfering in its business.

The suit was filed by Kwame Akuffo, lawyer for the plaintiff.

Background

Menzgold has been operating a business transaction which requires customers to deposit cash for gold value which is invested and returns paid on it to customers every month.

The transaction has become popular with customers evidently happy with the operations by the gold dealers. But there have been some concerns about lack of regulation.


The Bank of Ghana has issued a number of statements cautioning the general public to desist from saving or investing money at Menzgold Ghana Company Limited.

The statement in part said the activities of Menzgold were in breach of section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

According to the BoG, the gold dealers had no place in the business of “solicitation, receipt of money and the payment of dividends to its clients,” but the company persists in its deposit-taking activity.

Menzgold has adopted a topsy-turvy approach in dealing with the BoG with its CEO Nana Appiah Mensah calling the bluff of the regulatory body at one time and at another, apologizing and pledging to work with it.

But right in the middle of the drama with BoG, another state institution Security and Exchange Commission joined the fray, questioning the activities of Menzgold.

The Commission issued a statement describing the trading part of Menzgold operations as illegal.

While clearing the company to continue its “other businesses of assaying, purchasing gold from small-scale miners and export of gold” it warned Menzgold to desist from its gold trading operations which were in flagrant violation of “section 109 of Act 929 with consequences under section 2016 (I) of the same Act.”

But Menzgold is unhappy with the actions by the two bodies.

In the suit Menzgold wants the court to declare that its “business does not fall within the present legislated scope of the Banks and Specialized Taking Institutions Act 2016 (930).”

The gold dealers also want a declaration that the directives by the two institutions were arbitrary, capricious and contrary to Article 23 and Article 296 of the 1992 Constitution.

The company wants an order setting aside the directives by the two institutions and for them to retract and apologise for same.


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