Private legal practitioner, Ace Ankomah, wants managers of Menzgold, a gold dealership whose operations have been a subject of debate recently, to be mindful of the law when defending their activities as above board.
According to him, the indigenous company’s business module breaks at least three regulations – the Company’s Act, the Minerals and Mining Act and the Securities Industry Act.
“Let’s get it right. It started as Menzbank, with a ‘K’, Bank of Ghana stepped in; they changed their name to Menzbanc, with a ‘C’; Bank of Ghana stepped in; they changed their name to Menzgold, with metal. Let’s stop this molly cuddling these issues. We can see the thing. If it walks like a duck, quacks like a duck, sleeps like a duck, it is a duck. Under the company’s act alone, as a private company, you cannot take deposits – whether interest-bearing or fixed. The law says that clearly,” the renowned legal practitioner said on MultiTV/Joy FM’s news analysis programme Newsfile, Saturday.
Menzgold’s business operation has come under scrutiny for what many believe is a flagrant abuse of the laws regulating deposit-taking firms.
The company essentially offers an investor the opportunity to make huge returns – some 7% every month – on whatever has been invested. Menzgold converts the cash an investor puts into the scheme into equivalent gold tokens. These tokens are then deposited with the dealership for the monthly interests to kick in.
Touted by some as an innovative business module needing support, the company claims it trades the gold the investor has willingly agreed to deposit with them on the international market. Many doubt this claim on grounds that the returns on trading gold on the international market does not fetch enough returns to allow Menzgold to give 7% a month as returns to its investors in Ghana.
The Bank of Ghana and the Precious Minerals Marketing Company (PMMC) have faulted the company’s activities, while a section of the public think the business module resembles a Ponzi Scheme.