Menzgold sues Bank of Ghana and SEC

BY: Isaac Yeboah

Menzgold Ghana Limited has sued the Bank of Ghana and the Securities and Exchange Commission at the Commercial Division of the High Court for alleged illegal decisions and notices that the gold dealing firm says have harmed its business.

Menzgold is asking the court to make some declarations bordering on the nature of its business, as well as restrain the two regulatory bodies from further ‘baseless’ acts and to award exemplary damages against them.

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Among the specific reliefs sought by Menzgold are;

a. A Declaration that the Plaintiff's business does not fall within the present legislated scope of the Banks and Specialized Deposit - Taking Institutions Act 2016 (Act 930).

b. A Declaration that Plaintiff's business activities does not fall within the present legislated scope of the Security Industry Act, 2016 (Act 929);


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c. A Declaration that the 1st Defendant's Notices No. BG/GOV/SEC/2018/12 and BG/GOV/SEC/2017/24 dated 6th August 2018 and 28th November, 2017 respectively have hurt the business reputation of the Plaintiff;

d. A Declaration that the 2nd Defendant's Notice No. SEC/PN/002/09/2017 dated 22nd September 2017 has harmed the business reputation of the Plaintiff; and

e. A Declaration that the 1st Defendant's Notices No. BG/GOV/SEC/2018/12 and BG/GOV/SEC/2017/24 dated 6th August 2018 and 28th November, 2017 respectively are an abuse of the Defendant's discretionary powers contrary to Article 23 and Article 296 of the 1992 Constitution.

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The rest of the reliefs are for;

f. A Declaration that the 2nd Defendant's Notice No. SEC/ PN/002/09/2017 dated 22nd September 2017 is an abuse of the Defendant's discretionary powers contrary to Article 23 and Article 296 of the 1992 Constitution;

g. A Declaration that the directives contained in the letter of 7th September 2018 was an abuse of the 2nd Defendant's discretion as same was arbitrary, capricious and contrary to Article 23 and Article 296 of the 1992 Constitution;

h. An order setting aside the directives contained in the 2nd Defendant's letter dated 7th September 2018;

i. An order of the Court directed at the lst and 2nd Defendants to publish an unqualified retraction and an apology with the same
prominence with respect to the Notices dated 6th August 2018 and 22nd September 2017 respectively;

j. An order of Perpetual Injunction to restrain the 1st and 2nd Defendants, its officers, servants and agents from interfering with the Plaintiff's business activities or further acts of disobedience and non-compliance with law by publishing any such derogatory Notices;

k. Exemplary and Aggravated Damages for the harm caused to the Plaintiff's business reputation;

l. An order specifying a time limit within which the judgment of this Court should be complied with;

m. General Damages; and

n. Cost inclusive of the Plaintiff's Legal Fees.

According to a writ of summons by Menzgold, the two institutions, BOG and SEC, have by notices and warnings to the public to be wary of dealing with the company, and have conducted themselves in a manner that seemed to it that they as “Regulators were bent on finding fault and undermining its business.”

The writ identifies that Bank of Ghana, which is the1st Defendant in the case, as the Central Bank of the Republic of Ghana established by the 1992 Constitution and responsible for the regulation, supervision and direction of banking and credit systems and ensure smooth operation of the financial sector in Ghana.

SEC, the 2nd Defendant on the other hand, is a body corporate established and operating under the Security Industry Act, 2016 (Act 929) to regulate and promote the growth of the securities industry in Ghana.

The writ of summons further claims that Menzgold’s economic venture has been on-going for almost six years to the knowledge of the general public and the 1st and 2nd Defendants, and that in the said period a lot of people have accrued rights and that same cannot be interfered with in such an arbitrary, capricious or biased manner either by resentment, prejudice or personal dislike in the issue of directives and notices as same is contrary to the 1992 Constitution.

According to Menzgold, in spite of its denial that it was taking deposits, the regulatory bodies have persisted in their description of its business as deposit-taking but have failed to back the claim with any evidence.

“The Plaintiff says that in the face of the categorical Notices coupled with the absence of sufficient reason that the Plaintiff is engaged in Deposit - Taking and despite the exchange of correspondence between it and the Defendant in which the Plaintiff outlined its operations, the 1st Defendant in a grave abuse of power and misapplication of its regulatory control and influence, has been leaning heavily on the Plaintiffs Bankers especially Zenith Bank, persuading them not to conduct business with the Plaintiff and to that end Zenith Bank has since served notice of its intention to stop doing business with the Plaintiff.”

It is for these reasons and others that Menzgold is seeking an order of perpetual injunction to restrain the BoG and SEC, their officers, servants and agents from interfering with the it's business activities or further acts of disobedience and non-compliance with law by publishing any such derogatory notices."