We don't answer to you; we won't shut down – Menzgold to SEC

Local gold-trading firm, Menzgold, has, through its lawyer, Kwame Akuffo, written to the Securities and Exchange Commission (SEC) saying it will not shut down its gold investment operations as directed by the state body, since, according to the legal team, Menzgold’s activities do not fall under SEC’s regulatory authority.

In a letter dated 7 September 2018, signed by Deputy Director General, Paul Ababio, the SEC said: "In September 2017, the SEC issued a public notice indicating that it does not regulate Menzgold. The SEC began further investigations into the activities of Menzgold in July 2018. In August 2018, the Commission called for an inter-sectoral meeting that involved the Minerals Commission, Bank of Ghana and the Securities and Exchange Commission. The Meeting concluded that it is evident Menzgold’s activities appear to go beyond the mandate authorised in its licence".

The SEC added: "It is our expectation that being your licencee, MINCOM, would call Menzgold to order and direct it to conduct its business in accordance with the licence issued to it by MINCOM".

It follows several warnings from the Bank of Ghana to the local gold firm, to stop trading in gold without licence.

Reacting to the letter earlier on Wednesday 12 September, the management of Menzgold, in a statement, said: “It is very unfortunate that a letter relating to business discussions between the organisation and the Securities and Exchange Commission has found its way to the public.

“Menzgold, in the wake of the Bank of Ghana’s warning to the public to desist from doing business with the organisation, availed itself of all relevant state institutions for various consultations and dialogues designed to arrive at a productive and sustainable resolution.

“One of such organisations is the Securities and Exchange Commission with whom we have been hopeful of arriving at a cordial resolution to all matters, if any, then we submit to its standards, if we must.

“This needless leak believed to be coming from the Securities and Exchange Commission is, to say the least, in very bad faith and distasteful; as it defeats our confidence in the body and an affront to cooperation. We totally condemn it!”

Management of Menzgold said they have referred the matter to their lawyers for the right action to be taken and assured their customers that neither Menzgold as a business entity nor any of its products has been shut down.

“Your gold trades are very safe and business is proceeding as usual,” the company said.

In the evening of Wednesday, Menzgold’s lawyers, Kwame Akuffo & Co. Unlimited, responded to the SEC, thus: “We are instructed to respectfully inform you that our client’s business module, which is essentially that of the sale of gold collectibles, is not one that falls within your regulatory regime. Please be informed that our client is not issuing any ‘tradable Note’, as you erroneously state in your letter of 7 September 2018.

“Under the circumstances, we are instructed to inform you that our client finds your purported directive to shut down or suspend its operations untenable, and is unable to comply with the terms of your letter dated 7 September 2018, especially considering the contagion and effect on the market and its customers”.