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General News of Tuesday, 8 January 2019


The Menzgold story

It seems gross refusals on the part of customers of embattled gold collectibles firm, Menzgold Ghana Limited, not to heed to the warning from Bank of Ghana not to do business with the firm because its operations were found to be illegal, is the cause of the present problems they find themselves in.

Customers of Menzgold have had their funds or investments locked up as the firm faces potential collapse.

But a careful look at reports issued by BoG on the activities of Menzgold in 2017, 2016, 2015, and 2014 clearly indicated that had individuals who decided to do business with the company listened to the central bank, they would not have probably found themselves in the situation where today they cannot retrieve their deposits from the company.

Genesis of Crisis

The company’s problems began on September 7, 2018, after the Securities and Exchange Commission (SEC) directed it to suspend its gold trading operations.
The directive, according to SEC, was based on the ‘fact’ that Menzgold had been dealing in the purchase and deposit of gold collectibles from the public and issuing contracts with guaranteed returns to clients without a valid licence from the Commission.

The move, SEC explained, was in contravention of “Section 109 of Act 929 with consequences under Section 2016 (I) of the same Act.”

The company was, however, allowed to continue its “other businesses of assaying, purchasing gold from small-scale miners and export of gold.”

The directive caused panic among Menzgold Ghana Limited’s numerous clients, who consequently besieged the offices to demand their investments.
However, for several days, management of Menzgold failed to convince its clients to accept a proposed 15 percent initial payment on their principals.

Shortlived Normalcy

It was later gathered in November 2018, that ‘normalcy’ had returned to Menzgold, with the company said to have completely paid off about 30 percent of its clients.

But the reality has been that the company is unable to pay its customers who are now apparently turning their frustrations on government for their own stubbornness.

Some of the aggrieved customers have been accusing President Akufo-Addo, former President Kufuor, the National Chief Imam, Sheikh Nuhu Sharubutu and the Asantehene, Otumfuo Osei Tutu II, for their predicaments. They claim that the pictures of Nana Appiah with these important personalities gave the impression that he was doing a legitimate business.


According to the reports issued by the BoG and sighted by DAILY GUIDE, “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”.

Again, 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”.

Following the 2015 notice and the refusal of the company to desist from its illegal activities, on April 13, 2016, BoG issued a notice to warn the general public against the deposit-taking operations of Menzbanc.

And on July 22, 2016, DAILY GUIDE learned the Central Bank, wrote to Menzbanc cautioning it against its unlicensed deposit-taking activity.

On August 2, 2016, official reports say, BoG invited the management of Menzbanc to a meeting on its unlicensed deposit-taking activity.

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

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

Accordingly, on February 13, 2017, BoG held another meeting with representatives of the company.

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

“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”.

Mystery Shoppings

BOG conducted further investigations and did three “mystery shopping” transactions by enrolling on the company’s “Gold Vault market,” according to reports.

In the first purchase, the reports highlighted, no gold was seen throughout the transaction. Menzgold collected the cash with the explanation that they would purchase the gold from Brew Consult.

In the second case, this paper gathered that, on maturity, the mystery shoppers were given a piece of gold.

“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.”

“On 19th September 2017, Minerals Commission wrote a letter to Menzgold titled “Unauthorised Business Activities,” pointing out to Menzgold that its activities were in breach of the law and that Brew Marketing had not been registered as a licensed buying agent,” says the BoG reports.

In June 2018, BoG reportedly conducted a joint visit with Minerals Commission to licensed gold traders and refineries in Accra to understand the nature of their operations.

And the team, according to the report, established that all the companies were engaged in smelting and exporting of gold in the exception of Menzgold that is engaged in the solicitation of deposits from the general public with interest rates between 7%-10% per month to customers based on the quantity of gold purchased.

Illegal Activities

And after the series of investigations, BoG observed that the activities of Menzgold amounted to, among other things, “engaging in illegal deposit-taking contrary to section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).”

It added that its activities also amounted to “engaging in unlicensed mineral activity contrary to section 99(1) of the Minerals and Mining Act, 2003 (Act 703), engaging in illegal capital markets activity in breach of section 109 of the Securities Industry Act, 2016 (Act 929), and 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.”