The Securities and Exchange Commission (SEC) has shut down Nyak-City Hostels Limited for offering investment products to the public without the required licence.

The company, which was incorporated in 2025 by the Registrar of Companies, is an unlicensed asset-backed investment company.

Nyak-City Hostels Limited operates an investment product known as “Treasury Hostel Investment”, which it claims offers “a better alternative to a treasury bond” and promises investors guaranteed lifetime returns from investments in hostels over a period of 60 years.

Speaking to the media during the shutdown of the facility, Deputy Director General of the SEC, Mensah Thompson, said the Commission remains committed to sanitising the investment sector and protecting the renewed confidence in Ghana’s financial industry.

He said the SEC would no longer wait until investors lose money before taking action against entities suspected of operating without the required licence.

“We take action. We can't wait for the risk to happen for people to lose money before we take action. We are saying that the SEC is no longer going to sit back anymore.”

Mr Thompson said the Commission had received intelligence on the company’s activities and moved to shut down the facility before investors could potentially suffer losses.

“Once we receive intel, we move straight, shut the place down. If we need to arrest, we arrest. If we need to prosecute, we prosecute.”

He said the SEC was concerned about businesses hiding behind real estate to offer investment services to the public without the requisite licence.

According to him, the company was offering an investment product with a tenure of 60 years without the required regulatory approval.

He said such activities could undermine confidence in Ghana’s financial market at a time when confidence was gradually returning to the financial sector and the broader economy.

“These are the people who siphon away confidence from our market, and we need to work together so that we can protect the confidence that is gradually coming back into our financial sector and our economy.”

Mr Thompson stressed that investment products offered to the public must be licensed, vetted and scrutinised by the regulator to ensure that investors are adequately protected.

He said licensed investment products also provide regulatory and resolution mechanisms that can be activated if something goes wrong.

“People can invest safely in regularized products, licensed products that have been vetted, scrutinised and approved by the regulator to be offered to the public, so that tomorrow, if something goes wrong, there are resolution mechanisms that we can take them through.”

Mr Thompson said the SEC had invited representatives of Nyak-City Hostels Limited to its offices to begin discussions on the matter.

He explained that the Commission had, for now, taken what he described as a lenient action by shutting down the facility rather than making arrests.

He, however, indicated that further enforcement action, including possible arrests and prosecution, could follow if necessary.

The SEC says it will continue to take action against unlicensed investment operators as part of efforts to protect investors and safeguard confidence in Ghana’s financial sector.