Menzgold customers issue threats as investments lock up

BY: Jasmine Arku
Customers threaten to sue Menzgold over principal payments

Some aggrieved customers of Menzgold Ghana Limited have threatened to take legal action against the company to recover their investments if it fails to resume operations after its September 28 deadline.

The investments of the aggrieved customers have been locked up following the suspension of the company’s gold vault market services.

The threat by some of the customers followed a decision by the company to extend the suspension of its gold vault market services for the second time, in the wake of the controversy between it and the Securities and Exchange Commission (SEC).

Although the management of Menzgold was initially defiant in complying with the SEC’s order to shut down operations because the company was not licensed to do so, it announced last Wednesday, September 12 that it had placed a temporary halt on its operations.

The temporary suspension expired last Tuesday, September 13 and the company was supposed to resume operations on Wednesday, September 19, 2018.


However, in another statement signed by the Head of Communications, Mr George Quaye, and issued in Accra last Tuesday, the company said it had extended the suspension of its services to the public until Friday, September 28, 2018.

“Following our correspondence with the Securities and Exchange Commission (SEC), we regret to advise that the Gold Vault Market product services will continue to be suspended until the 28th September, 2018 to enable us to reach a useful conclusion with the Securities and Exchange Commission (SEC).

“The inconvenience caused by factors beyond our control is deeply regretted. We continue to thank you for the support, patience and cooperation we have received from you in these trying times. It shall be well,” the statement said.

East Legon office

When the Daily Graphic visited the East Legon offices of the company in Accra on Wednesday, it observed that the offices had been closed to customers.

However, scores of customers had thronged the premises to seek clarification on the reasons behind the extension.

The customers were not allowed onto the premises of the company, as security guards had kept the gates locked.

The security guards prevented media men from filming or taking pictures of the development at the gates.

The anxious customers expressed anger at the media for throwing the spotlight on the company to escalate its woes and, therefore, refused media interviews on the matter. 

Some of them threatened to initiate a class action to ensure that their investments were paid to them.

One aggrieved customer who spoke to the Daily Graphic on condition of anonymity expressed displeasure at the manner in which the company was treating its customers and said she was going to lead the class action if the company failed to resume operations after the extended date.

According to her, she wanted to terminate her contract and withdraw her principal amount but she had been refused audience by officials of the company.

“I think they are taking us for granted. I have a contract with Menzgold and our contract says we can terminate it at any time… The first message we got was that they are halting payment of extra value and then new services.

“It doesn’t say that my old services have been cancelled out. So I’m here for my principal; my principal which is not an extra value; my principal which is not a new service; that is why we are all here to come and terminate,” she said.

Expressing displeasure at the way and manner clients had been treated by Menzgold, she threatened to mass customers up against the company for breaching their contract terms and “for the fact that they weren’t authorised to [trade]”.

“We are sounding a caution to them that the government has been on them; the next one will be we the clients being on them. If the government wasn’t able to bring them down, we the masses will bring them down. So, we, the masses, give them up to the 28th; if we don’t see any favourable terms from them, the next action will be a class action against Menzgold,” she said.

Customers

Among the numerous Menzgold clients across the country are said to be high-level military and police officers, bankers and entrepreneurs.

In the Western Region town of Tarkwa, for instance, many of the town folks are said to have investments at Menzgold because of the high returns the company offers.

Other investment companies have witnessed their customers withdrawing their investments, even before maturity, and sending them to Menzgold.

Already, a former Chief Executive of the Minerals Commission, Dr Tony Aubynn, has urged the government to tread cautiously in its dealings with Menzgold.

In a radio interview over the past weekend, Dr Aubynn said: "I tell you if caution is not taken, we are going to have a national funeral."

Stressing the deep level of patronage the company enjoyed, Dr Aubynn said he knew an official who had GH¢500,000 with Menzgold.

"May be the biggest funeral will happen in my hometown, Tarkwa," he said, adding that virtually all entrenched workers of mining companies in the area had investments at Menzgold.

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

Suspension

Menzgold, last Thursday, September 13, 2018 issued a six-day temporary halt of its operations following a directive by the Securities and Exchange Commission (SEC) ordering the company to suspend its trading activities.

Already, the SEC has ordered the company to halt advertising its investment business and desist from creating new contracts with depositors.

The suspension came on the back of investigations conducted by the regulator that found that Menzgold's business, which involves the purchase/deposit of gold from the public and contracts issued with guaranteed returns with clients, is a capital market activity which cannot be conducted without a valid licence issued by the SEC.

SEC meeting postponed

Meanwhile, a scheduled meeting between officials of the SEC and the management of Menzgold last Tuesday, September 18, was postponed to today, September 20, 2018.

The postponement, according to the SEC, was due to Menzgold’s failure to furnish it with the information it requested in a previous letter which, according to the SEC, would, among other things, enable it to make certain determinations about the operations of Menzgold.