Resumption of Menzgold business uncertain-SEC
The Securities and Exchange Commission (SEC) says it is uncertain when gold dealership company, Menzgold Ghana Limited, will be made to resume full operations.
That, according to the SEC, was due to the unavailability of “specific detailed information” concerning the operations of the firm from its management.
The SEC, however, says its order to Menzgold to shut down its gold vault market did not include the non-payment of dividends to customers.
In an interview with Accra-based Citi FM yesterday, the Deputy Director of the SEC, Mr Paul Ababio, said its order to the management of Menzgold was for the company to halt advertising its business and desist from creating new contracts with depositors.
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The explanation comes on the back of a statement issued by the management of Menzgold on Tuesday, September 25, 2018, that it was unable to pay dividends to customers because of the SEC’s order.
According to Menzgold, it paid profits to customers based on the profits it earned on trading.
It, however, said since the suspension of its operations on Thursday, September 13, 2018, the company had not been able to generate any revenue out of which profits could be paid to customers.
“The gold collectibles offered for trade by patrons of our gold vault market product are subjected to our quality controls and traded for profit which is shared as extra value with the product owner or trader.
“Any act, order or instruction, therefore, designed or decreed to forbid Menzgold from trading makes it impossible to generate any revenue whatsoever out of which extra values are charged and paid to those entitled,” it stated.
Mr Ababio said the SEC was not interested in collapsing businesses.
“Our primary concern is the risk that this may become a potential liability to us, because we also have the public’s interest at heart.
“We are supportive of entrepreneurs…a few questions are what kind of promises are you making and do you have the ability to support those promises,” he said.
Mr Ababio said until the requested information was made available, Menzgold would remain shut.
“We may have finished with our investigation but actual implementation of the results of that investigation is also subject to their willingness to cooperate because we requested for information in August; we have sat with their lawyers with a few back and forth, and we still haven’t received information from them.
“So if we have the information, one might say within a matter of weeks we should have some closure; then the question now becomes the action items arriving from that determination,” he stated.
Mr Ababio, therefore, stressed the need for the management of Menzgold to fully disclose all relevant data to enable the commission to streamline the company’s operations.
Menzgold temporarily shut down its operations on September 13, 2018 following the SEC’s directive that its operations contravened the Securities Industry Act, 2016 (Act 929).
The temporary halt which was to last for six days was, however, postponed to Friday, September 28, 2018.
The postponement, however, did not sit well with its customers who thronged the premises of the company to demand their monies and explanations.
But Menzgold, in its statement last Tuesday, assured its customers that “all gold trades are safe”.
“The leadership of the firm will continue to engage with the relevant bodies to expedite the reimbursement of all entitlements,” the statement added.