Former Chief Executive of the Minerals Commission Dr. Tony Aubynn has urged government to tread cautiously in its dealings with gold dealership company Menzgold.

Menzgold initially defied the Securities and Exchange Commission directive to shut down its gold trading operations for operating without a licence. It later complied.

The business module of the company involves clients buying gold collectibles and depositing them for a guaranteed return between 7% to 12% every month.

The Bank of Ghana, Precious Minerals Marketing Commission (PMMC) and now the SEC have been harping that this business is unregulated.

Menzgold has repeatedly replied these institutions that it does not need a licence from any of them because they are not the appropriate regulating body.

The gold dealership enjoys substantial support from a wide range of an unknown number of clients, some of whom are unmoved by SEC's attempt to stop the company.

Speaking on the controversy, the former Minerals Commission CEO told Joy News Wednesday, Menzgold clients are among high-level military, police officers and bankers.

"I tell you if caution is not taken, we are going to have a national funeral", he revealed the deep level of patronage the company enjoys.

Dr. Tony Aubynn who is the President of the Africa Institute for Extractive Industries (AIEI) said he knows an official who has 500,000cedis with Menzgold.

"Maybe the biggest funeral will happen in my hometown Tarkwa," Tony Aubynn said and explained virtually all entrenched workers in mining companies in the area have investments at Menzgold.

He said happenings at Menzgold have serious implications for Ghana's financial system. 

Menzgold's third battle with a regulator last Wednesday triggered panic withdrawals. Joy News reported, at least 200 clients rushed to the company's East Legon office concerned about the security of their investments.