Why gov't won't pay Menzgold customers

Government says it will not use the tax payer’s money to settle the aggrieved customers of embattled gold trading firm, Menzgold Ghana Limited.

A statement issued on Thursday and signed by the Minister of Information, Mr Kojo Oppong Nkrumah said although government sympathizes with customers of Menzgold following the failure of the latter to meet its contractual agreement with the former, the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC) are not clothed with any legal mandate to refund monies to clients.

It said, calls by some customers for government to intervene in the matter just as it did for customers of DKM; whereas DKM was licensed by the BoG, Menzgold operated as a trading company and thus falls outside the scope of the regulator’s intervention.

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It recalled that as far back as April 2016, regulators in the financial sector on several occasions warned customers to desist from investing monies in the company as it was not licensed to do so but those warnings were disregarded.

It, therefore, advised customers whose contractual obligations have not been met by Menzgold to seek legal redress to retrieve their funds.

“In the case of banks and specialized deposit taking institutions, as well as asset management companies licensed and regulated by BOG and SEC, owing to the fact that these companies were regulated by BoG and SEC, the regulators are clothed with the legal mandate to intervene in their matters, in accordance with law. DKM, for example, was licensed by the BoG, the reason for which it stepped in to help retrieve the monies of depositors. In the case of Menzgold, it operated as a trading company and falls outside the scope of the regulators' intervention,” the statement said.

It, however, noted that the security agencies would employ all the powers of the State to ensure that the Chief Executive Officer of Menzgold, Nana Appiah Mensah, is found and investigated.