Private legal practitioner, lawyer Nkrabea Effah Dartey, has suggested the government of Ghana is only obligated to take Menzgold and its directors on for breaching the regulations and buying gold and subsequently advancing interests to investors.
The lawyer says it is the obligation of investors and depositors to take the company on for failing to advance their interests.
He says the government cannot be forced by customers to deal with the company on the aspect of retrieving their cash.
He told Rainbow Radio’s Kwabena Agyapong that, the company breached its licence and so government will prosecute the company on that but stressed customers would have to sue the company for breach of contract.
He said, Menzgold’s business module of buying gold and subsequently advancing interests to investors in Ghana is in clear breach of its licence agreement.
The relevant section of the Licence Agreement states the following:“The company [Menzbanc] is hereby authorised to purchase gold locally from any person holding a small-scale mining licence (“small scale miner”) at the Company’s registered offices in Ghana and to export same in accordance with the terms of this Agreement.”
This has been interpreted to mean that the company can only do two things:
- Buy gold but from only small-scale miners.
- Export the precious stones.
In 2016, the Minerals Commission stated in a letter that the Minister of Lands and Natural Resources granted Menzgold a “License to Buy and Export Gold.” The license required that Menzgold “purchase gold from any person holding a small scale mining license and to export the gold.”
The letter continued: “The license also entitled Menzgold to register persons who would be certified by the Commission as licensed buying agents of Menzgold to enable them to buy gold on behalf of the company.”
The Bank of Ghana is a caution letter to the public said the company has no authority to engage in what it says are the “solicitation, receipt of money or investment and the payment of dividends or returns to its clients.”
The central bank maintained that Menzgold is in breach of section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
Menzgold has also insisted that: “The activities of MenzGold Ghana Limited is restricted to allowing customers to purchase gold or deal in gold as an alternative investment. The Bank of Ghana is clearly aware that these activities are outside the scope of The Banks and Specialised Deposit-Taking Institutions, Act, 2016, Act 930.”
“MenzGold Ghana finds it unfortunate and disparaging that the Bank of Ghana, with whom we have had a number of engagements over the years and taken them through our business procedures would still issue such a statement. Unfortunate and insensitive as the statement may be, we are resolved and even keener to continue to deliver the best of service to our customers in Ghana and beyond.”
“Management assures the general public that doing business with MenzGold is safe. The Company is growing in strength and expanding with offices recently opened in United Kingdom, Spain and soon in Nigeria. Our doors as always are open to the Bank of Ghana and any other organization that would want to seek clarity on our business.”
“That said, it is imperative that Government and other State Intuitions support indigenous business initiatives to thrive in this economy while putting in the correct supervisory mechanisms to ensure that they operate within the remits of the law. We pray that authorities will show more interest in building, nurturing and supporting business growth in an enabling atmosphere as anything to the contrary could be detrimental to the economy of the Nation,” the company said in a letter in 2018.
A warrant has been issued for the arrest of Nana Appiah Mensah and some two others by an An Accra Circuit Court.
This lawyer Effah Dartey says it is the best decision.
He called on customers to take the company on for breaching their contact and stop mounting pressure on government.