The Attorney-General and Minister for Justice, Godfred Yeboah Dame, has said the docket on the prosecution of the Chief Executive Officer (CEO) of the defunct Menzgold, Nana Appiah Mensah, is almost ready.
“I'm happy to say that after painstaking investigations, the docket on that financial crime is almost ready for prosecution to commence,” he said.
Speaking on: “The financial sector crisis in Ghana” at the Cambridge International Symposium on Economic Crime at the Cambridge University in the United Kingdom yesterday, Mr Dame said the activities of many unlicensed entities contributed to the crises in the financial sector which shook the foundations of the country’s financial system between 2017 and 2020.
The forum was organised by some of the world’s leading educational and research institutions, with the involvement of numerous governmental agencies, the judiciary, legal practitioners, compliance bodies and the business world.
It provided a platform for the practical analysis and discussion of the real threats facing the world as a result of criminal and subversive activities.
Speaking on how the leaders of such illegal financial entities lived their lives, the minister said: “The leaders of such entities often lived lavish lifestyles in response to their activities.”
“Prominent among such institutions was an amorphous organisation operating a microfinance institution under the guise of gold trading and illegally using the name of a bank.
“It called itself the MenzBank. Apparently, Menzgold, which it was also called, had been dealing with the deposit of gold and collectibles for the public and issued contracts with guaranteed returns to its clients without a licence from its regulators and relevant authorities,” he added.
Mr Dame told the forum that against warning from the central bank, tens of thousands of individuals hooked onto the scheme, and following the closure of the entity by the security agencies, the customers could not retrieve their files.
“The company relied on the greed and ignorance of thousands of people and hardworking Ghanaians, resulting in the loss of millions of dollars,” he said.
“The situation has caused misery and distress in many homes and unleashed social crisis, as thousands broke out on the streets to demonstrate throughout the country,” he added.
He said in real terms, people had lost their homes and some marriages had even broken up as a result of the Menzgold saga.
On the larger scale, Mr Dame said the Office of the Attorney-General was also prosecuting other high-profile cases involving the offences of wilfully causing financial loss to the state, stealing, corruption, fraud, procurement breaches and money laundering.
Those cases, he said, involved over $850 million.
To prevent the current situation from recurring, he said, 20 individuals and companies were put on trial for offences bordering on stealing, breach of trust, money laundering, dishonestly receiving and causing financial loss to the state.
Sovereignty of banks
Taking a further look at the financial crisis, the minister made reference to the Bank of Ghana, saying that the sovereignty of the banks was the major reason for the seizure of the operational licences of the affected banks.
“A deeper examination of the banking sector crisis that rocked the financial sector of the country showed that poor corporate governance, non-performing rules, breach of directors’ traditional obligations, credit risk and regulatory lapses were responsible for the vulnerabilities the banks were exposed to,” he asserted.
Mr Dame said internal auditors who were required to carry out proper accounting practices became complicit in the illicit practices.
The banking crisis, he explained, had ramifications for the economy of the country, saying “it was the most severe economic crisis to affect Ghana since independence in 1957”.
He added that the COVID-19 pandemic gave a further devastating blow to the economy.
The minister said the government was doing everything possible to tackle corruption.