Menzgold Ghana Limited will later today [Wednesday], resume payment of returns to its customers after halting payment last Tuesday.
The company couldn’t pay all the customers who showed up at their offices on Tuesday to receive the dividends which were due, indicating that it wanted to revise its payment schedule to avoid causing chaos.The new plan considers the backlog of customers who were unable to receive their extra values per the previous schedule.
The Deputy Head of Communications of Menzgold, Nii Armah Armateifio, explained that the new schedule is to ensure that all customers qualified to receive their extra values are duly paid.
“We decided to review the schedule. So now what we are going to do is that we are serving names of people who fall within the category of the date which was given. We didn’t do payments on Tuesday because it was the day that we started with the new schedule. On Wednesday we’ll resume payments,” he said.
Addressing a press conference last Thursday, Corporate Affairs Manager of Menzgold, Nana Yaw Ofei, explained that the company will pay all its customers that were trading with them until September 12, when a directive from the Securities and Exchange Commission, SEC, interrupted their operations.
This means those who invested with them after September 12, 2018, “will not get any form of returns”.
Mengold sues BoG, SEC
This latest development which will come as a relief to their customers follows Menzgold’s suit against the Securities and Exchange Commission (SEC) and the Bank of Ghana.
The company in its suit is seeking from the court an order directing the two institutions to stop interfering in its business.
Menzgold among others asked the court to stop the Bank of Ghana and the SEC from publishing what it described as “derogatory notices” against its business.
“An order of perpetual injunction to restrain the Bank of Ghana and Securities and Exchange Commission, its officers, servants and agents from interfering with Menzgold’s business activities or further acts of disobedience and non-compliance with law by publishing any derogatory notices.”
Menzgold was asked to suspend its gold trading operations with the public by the Securities and Exchange Commission (SEC).
According to the SEC, Menzgold has been dealing in the purchase and deposit of gold collectibles from the public and issuing contracts with guaranteed returns with clients, without a valid license from the Commission.
This, the SEC said this was in contravention of “section 109 of Act 929 with consequences under section 2016 (I) of the same Act.”
The company was however cleared to continue its “other businesses of assaying, purchasing gold from small-scale miners and export of gold.”
Despite initial protests, Menzgold complied with the directive
Delay in payments
Menzgold was initially unable to pay its customers matured investments on their gold deposits due to the action taken against it by the SEC.
“The gold collectibles offered for trade by patrons of our gold vault market product are subject 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,” Menzgold said in a statement.
But the SEC did not agree with Menzgold’s position, saying the action did not stop them from paying customers dividends on already existing investments.
Failure to communicate
The SEC said it did not receive adequate information from Menzgold after it ordered the suspension of its gold trading business.
Speaking on the Citi Breakfast Show on Wednesday, Paul Ababio, Deputy Director-General at SEC, said that the flow of information from the gold dealership firm to enable the two parties reach a favourable consensus has not been smooth.
“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 added.