This is All That Has Been transpiring Between Menzgold and Bank of Ghana/PMMC/SEC Since 2014

Management of Menzgold has announced Thursday morning that it has temporarily halted its collectibles and any new business related to its gold vault market with immediate effect.

According to the company, the halt of what is also called extra value payments takes effect from today Thursday, September 13 and will be in place for six days, “by which time we believe all pending issues related to the Gold Vault Market Product would have been ironed out.”

The company is hopeful the halt would not go beyond September 19, 2018.

“This decision, though very unfavourable to us has been informed by our commitment to the rule of law, absolute respect to state agents, agencies and total submission to the state,” the press release, stated.

THE ENGAGEMENT SO FAR SINCE 2014 WITH THE STATE AUTHORITIES:

1. On October 28, 2014 Bank of Ghana discovered, in a special exercise within the Central Region, that Menzbank was operating microfinance in Kasoa under the guise of gold trading and illegally using the name “Bank”.

2. On March 11, 2015 BOG issued notice number BG/GOV/SEC/2015/04 publishing a list of unlicensed entities operating illegally, including Menzbank. Menzbank then changed its name to “Menzbanc Ghana Company Limited”.

3. On April 13, 2016 BOG issued a notice to warn the general public against the deposit-taking operations of Menzbanc.

4. On July 22, 2016, BOG wrote to Menzbanc cautioning it against its unlicensed deposit-taking activity.

5. On August 2, 2016 BOG invited the management of Menzbanc to a meeting on its unlicensed deposit-taking activity.

6. The company responded in writing on August 3, 2016 and claimed that they were not engaging in deposit-taking activities.

7. On August 16, 2016, the BOG contacted Minerals Commission and Precious Minerals Marketing Company (PMMC) on the licence status of Menzbanc. Minerals Commission confirmed the company had a licence only “to purchase gold locally… and to export same”. However its licence with PMMC had expired.

8. On February 13, 2017, BOG held a another meeting with representatives of the company.

9. On July 19, 2017, BOG issued another caution letter to the company to desist from taking further deposits.

10. Menzbanc then changed its name to Menzgold. It also informed the BOG of its subsidiary by name “Brew Marketing Limited” where clients were directed to go and purchase the gold and deposit it with Menzgold for “dividend”.

11. BOG conducted further investigations and did three “mystery shopping” transactions by enrolling on the company’s “Gold Vault market”. In the first purchase, no gold was seen throughout the transaction. Menzgold collected the cash with the explanation that they would purchase the gold from Brew Consult.

12. In the second case, on maturity, the mystery shoppers were given a piece of gold.

13. In the third purchase the mystery shoppers were directed to purchase the gold from Brew Marketing Consult, and deposit the gold in its vault where the trading began.

14. On 19th September 2017 Minerals Commission wrote a letter to Menzgold titled “Unauthorised Business Activities,” pointing out to Menzgold that it was in breach of the law and the Licence and that Brew Marketing had not been registered as a licensed buying agent.

15. In June 2018, BOG conducted a joint visit with Minerals Commission to licensed gold traders and refineries in Accra to understand the nature of their operations. The team established that all the companies were engaged in smelting and exporting of gold with the exception of Menzgold that is engaged in the solicitation of deposits from the general public with interest rate between 7%-10% per month to customers based on the quantity of gold purchased.

These activities amount to:

1. Engaging in illegal deposit-taking contrary to section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930),

2. Engaging in unlicensed mineral activity contrary to section 99(1) of the Minerals and Mining Act, 2003 (Act 703),

3. Engaging in illegal capital markets activity in breach of section 109 of the Securities Industry Act, 2016 (Act 929), and

4. A private company inviting the public to deposit money or invest in its business in breach of section 265 of the Companies Act, 1963 (Act 179) and section 207 of Act 929.