NAM1 and Menzgold a business idea, model deflated?

BY: Gloria Ofori-Boadu
The headquarters of Menzgold
The headquarters of Menzgold

I recently saw a picture on social media of Nana Appiah Mensah (NAM1), the CEO of Menzgold, in a single room with cheap curtains, a fan and mattress on the floor.

The only doubtful aspect of the photo was that though it was purported 10 years ago, his features then and now had not changed and reflected no ageing.

 Even though the source of the picture was not verifiable, it sought to depict that barely a decade ago, NAM1 was a pauper living in a chamber with probably no hall, kitchen, washroom or other amenities.

However, he got a business idea to sell an identifiable value of gold collectibles to the general public, while holding on to the collectibles and paying very attractive interests to collectible owners resident in Ghana and abroad.

 This business idea, which he was able to effectively implement over a period of time through an independent, probably registered company, Menzgold, was what appears to have propelled him from poverty to wealth and fame.

Branding, marketing, staffing

The business idea came with a brand whereby all Menzgold branches in Ghana had gold or brass-looking plated walls and well-located billboards in town, coupled with purported endorsements by celebrities and persons of repute to the safety and soundness of people’s investments in gold collectibles.  

The collectibles purchased by clients was trustingly kept by Menzgold in their “highly secured vaults” with high interest-yields of about 10 per cent per month paid to clients periodically and honourably by Menzgold’s staff.
The marketing caught on and a yet-to-be-known or unverified numbers, probably hundreds of thousands or millions of customers caught onto the Menzgold fever.

It is reported that some people withdrew their monies from the “conservative, risk-averse, lack-lustre  and boring” banks, whose interest rates on  government’s Treasury bills, borrowed through Bank of Ghana (BoG) were about 14 per cent  per year and interests on savings and fixed-deposits at even ridiculously lower rates.
The business model was so globally attractive that some Ghanaians who lived in the diaspora, jumped on the gold train by borrowing foreign currency, including US$ and UK pounds at their countries of domicile, to invest in their Motherland.    

Honestly, everything appeared  golden until the Ghana’s Securities and Exchange Commission (SEC) began publications in the dailies, warning the general public of the dangerously risky investment in the collectibles because Menzgold activities were unregulated.  


Off course, Nana Appiah Mensah, also known as NAM 1, was horrified at the scare-mongering by SEC, which naturally was adversely impacting his business.

 Naturally, some of his clients and staff were also quite agitated considering the tremendously high unemployment rate in Ghana coupled with the very-slow gain of investing in some of these banks that for centuries, since the British introduced their banking model on the shores of the Gold-coast, have not  been able to attract at least even 20 per cent of Ghanaians, to own or boast of a bank account.

Finally, in early September last year, the SEC in their regulatory role, ordered Menzgold to stop the business of collecting monies from clients to purchase gold collectibles.

SEC also wanted access to Menzgold’s corporate information to ascertain whether the unique business model was sustainable or not.

 It is further reported that the SEC assured Menzgold that the latter “corporate” body would be given the requisite licence if and only if the SEC found their activities to be favourable  and sustainable to clients.

Clients were thrown into panic and they started rushing en bloc to the “Co” to demand their lifetime investments, including some retirement benefits.

 Menzgold assured the public and their clients that all was well, but the ancient-old media jumped into the foray and began giving conflicting reports.

Menzgold rushed to the High Court seeking refuge in the Constitution and Administrative law which provided as follows: that an administrative body such as the SEC and its official, shall act fairly and reasonably and comply with the requirements imposed on them by law and persons aggrieved by the exercise of such acts and decisions shall have the right to seek redress before a court or other tribunal.

 Also, where in the Constitution or in any other law, discretionary power is vested in any person or authority i.e. SEC, the exercise of the power shall not be arbitrary, capricious or biased either by resentment, prejudice, or personal dislike and shall be in accordance with due process of law.”

Menzgold also frantically appealed to the Finance Committee of Parliament to serve as an arbitrator in the confusion but alas, the Finance Committee, it was reported, was yet to sit on the matter.

 A deflated Menzgold, unable to bear the onslaught from all quarters, gradually began shutting down its offices and operations.

Corporate governance

The High Court is reported to have ruled in favour of the SEC to investigate Menzgold.

 I would appreciate it if the SEC could answer the following to the good people of Ghana, in respect of transparency and accountability: How many branches were operated by Menzgold?

How many clients were at each branch?  

How many gold collectibles had each client purchased? How much interest had been paid or yet to be paid to each client?

Was the CEO, NAM1, an executive chairman or was he the CEO, while a different experienced person served as the board chair of the “Co”? Was it a limited liability company or an unlimited liability company, or a partnership or sole proprietorship?  

Regulatory matters

What is the SEC going to regulate?

 Is it the Menzgold operations? If it is a registered company, will there be a receiver appointed?

 Can all clients be identified if they are known or become known as shareholders of the ” Co”?

  Can each client be given their principal and yield or a percentage of what was due them as of last September when the SEC ordered a closure of Menzgold’s collectible purchases?

Per chance, did any of the insurance firms insure any of the gold collectibles against unforeseen disasters and does the GRA have any information on taxes paid by Menzgold in respect of its operations and P.A.Y.E. of staff salaries and allowances?  

The NAM 1 business model, with all the lessons in corporate governance, which hopefully have been learnt by all stakeholders, is worth studying as a home-grown model at our business schools.

The writer is a lawyer and lecturer at the Ghana Institute of Management and Public Administration (GIMPA) Business School

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