Bank of Ghana telling banks not to do business with us – Menzgold

The lawyer for Menzgold Ghana Limited, Kwame Akuffo, has alleged that the Bank of Ghana is colluding with commercial banks to collapse the gold-trading company.

“I know for a fact that the central bank is telling banks not to do business with us; that wouldn’t be proper for an economy which thrives on free market, can that be proper?” Mr Akuffo asked in an interview with Accra-based Starr FM’s Ibrahim Alhassan, adding: “The central bank wants to find a way to cripple us, which is untenable”.

Mr Akuffo said even though he would not want to jump to conclusions on mere suspicions that the financial regulators are going after Menzgold so as to shore up liquidity in the banks, “…There is reasonable grounds from other informed members of society that Menzgold is attracting lots of gold deposits and that they are taking away money from the banks”.

Menzgold, on Wednesday, 12 September, announced that it was temporarily halting its extra value payments and any new business related to its Gold Vault Market.

“The halt takes effect from Thursday, 13 September and will be in place for 6 days, by which time we believe all pending issues related to the Gold Vault Market Product would have been ironed out,” management of the company said in a statement.

“We are certain this halt would not go beyond the 19th day of September, 2018,” the statement added.

This follows a letter by the Securities and Exchange Commission (SEC) instructing the gold-trading firm, to stop forthwith, all investment trading in gold without a licence.

In the 7 September 2018 letter 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 a licence.

The central bank, on 7 August 2018, issued a public notice, the fourth of many, that it was in discussions with relevant regulatory authorities to sanction Menzgold for engaging in “solicitation, receipt of money or investment and the payment of dividends or returns to its clients” without a licence to do so.

The BoG, in an advertorial in the dailies signed by Mrs Caroline Otoo, Secretary to Governor Dr Ernest Addison, said in spite of several of cautions to Menzgold Ghana Company Limited to desist from the act, it persists in its deposit-taking activity in breach of section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).