Menzgold customers threaten to sue govt

Customers of Menzgold have threatened to sue the government over their locked up funds.

It comes after Vice President Dr. Mahamudu Bawumia stated categorically that the Akufo-Addo government will not pay them with taxpayers money.

“Menzgold is not a licensed financial institution. We are talking about licensed financial institutions but if you set up your 419 institutions and the Bank of Ghana warned repeatedly that people should not do business with Menzgold because they were not a licensed financial institution, so, you can’t use taxpayers’ money to pay locked-up funds of an institution that is not a licensed financial institution,” Dr Bawumia told Techiman-based Link89.1 FM in the Bono East Region during his recent tour there.

However, in a statement Monday, the customers of Menzgold said: “Further to our letter in January 2020, kindly take notice of our firm’s intention to issue a Civil Suit within 1 month of the date of this letter against the Criminal Investigation Department, the Security and Exchange Commission, Bank of Ghana, the Minerals Commission as well as the Attorney General’s department.

“The names and addresses of our clients are attached to this letter. Public Interest 3. The Menzgold matter though deeply unfortunate and preventable, may be an opportunity for Ghana to define in court the extent to which government institutions owe a specific class of investors a duty of care if the State fails to intervene in terms of shutting down a white-collar criminal enterprise at the earliest possible opportunity instead of much later, when most clients invested from 2017 onwards”.

The statement added: “By beginning to define where one institution’s duty begins and another one ends, we may in future be able to ensure the public as well as agencies are more versed in understanding and preventing the actions of those who employ long-term and not short-term strategies to defraud in the unregulated financial sector.

“For the regulators exist more so to detect, apprehend and penalize entities that are unregulated so as to prevent them from causing mass financial loss to the general public, the longer the illegal operations go on. Our position is that public interest far outweighs the State’s interest in not paying out to unregulated financial companies. This is because the State’s inaction in not shutting down Menzgold and Brew Marketing much earlier (even within the first year) meant that more and more investors were able to deposit their monies with Menzgold and Brew Marketing which lead to an unprecedented financial loss to the general public”.

Below are other details of the statement

CAUSE OF ACTION

7. Our clients have not been able to access and retrieve their invested funds when the Securities and Exchange Commission suspended the operations of Menzgold Ghana Limited on the 7th day of September 2018. MENZGOLD GHANA LIMITED AND BREW MARKETING CONSULT LIMITED WERE TAKING IN MORE MONIES THAN THE AVERAGE BANK IN GHANA

8. I am sure your investigations have confirmed what our investigations have shown. Having spoken to bankers and investors in Ghana, Ghanaians on average were removing their monies from most banks in Ghana in order to put their monies into Menzgold and Brew Marketing which lead to mass financial loss to the general public 5 years after Menzgold was established with thousands of more investors investing higher sums of monies the longer the illegal enterprise was allowed to operate. Ultimately when the State is besieged by those engaged in a criminal enterprise and in particular a typical Ponzi scheme, the rule of thumb is to shut down operations earlier so as to prevent more investors investing larger amounts of monies the longer the DEPOSITS

9. Furthermore, astronomical domestic and international bank transfers, as well as large cash deposits, were paid to Menzgold and Brew when they were in operation, so much so that most banks in Ghana do not have as many deposits per day as these entities did. For that alone, state institutions should have shut down the operation of Menzgold and Brew within the first few months of their operation; like they did with Menzbank and Menzbanc. Both Menzgold and Brew operated without adequate government licenses over an unusually prolonged period of time and there was enough of a prima facie case to have demanded the closure of both institutions including the history and propensity of the directors to commit similar type offences.

THE BASIS OF SHUTTING DOWN MENZGOLD GHANA LIMITED AND BREW MARKETING CONSULT LIMITED COULD HAVE APPLIED WITHIN THE FIRST THREE MONTHS OF OPERATION INSTEAD OF 5 YEARS LATER

10. It is unfortunate that the reason in which S.E.C ultimately shut down the operations of Menzgold Ghana Limited on the 7th day of September 2018 existed at the very first instance when the company began its operations and thus S.E.C was reckless in not shutting down Menzgold Ghana Limited much earlier when they began operating.

Furthermore, the history and the propensity of the Directors were known to state agencies and the delay in shutting down the operation lead to thousands of more investors being able to invest in the companies over time much larger amounts, since this is the nature of any Ponzi scheme, they exist to entice the bigger investors towards the end of their operation.

CLAIM AGAINST THE CRIMINAL INVESTIGATION DEPARTMENT

11. It is our client’s firm position that the Criminal Investigation Department failed in its duty to thoroughly investigate and prosecute the criminal case reported to them in 2011-2012 which involved Mr. Nana Appiah Mensah who committed a similar type offence to the one that the State is now pursuing him for (which has been delayed in court where the Prosecutor in the case recently asked for another long adjournment).

12. C.I.D in 2011-2012 received evidence that Mr. Nana Appiah Mensah, a director of both Menzgold Ghana Limited and Brew Marketing Consult Limited had set up SF Gold Ghana Limited to defraud upwards of 53 people within the Weija enclave through a company known as SF Gold Ghana Limited.

Although C.I.D charged Nana Appiah Mensah, a director of both Menzgold Ghana Limited and Brew Marketing Consult Limited for defrauding by false pretences and prosecuting him for conspiracy to defraud the complainants in before 2012; C.I.D did not follow the case to its natural end when Nana Appiah Mensah did not fulfil his bail terms and absconded.

13. Had Mr. Mensah been properly pursued by C.I.D in 2011-2012, he may well have been put in jail instead of conceptualizing and actualizing the entities known as Menzgold and Brew to the absolute financial detriment of countless Ghanaians which is against public interest.