Editorial: Why should state funds be used to pay Menzgold customers?

Classfmonline.com reported on Saturday that Menzgold customers demonstrated at the forecourt of the office of Zylofon Media, one of the many businesses of Nana Appiah Mensah (NAM1), owner of the now-defunct gold-trading company.

The angry demonstrators, the online portal continued, accused the Akufo-Addo-led government of colluding with NAM1 to rob them of their investments. They, therefore, threatened to vote against the New Patriotic Party (NPP) government if their locked-up funds were not released to them.

Since the 1992 republican constitution guarantees the right to demonstrate, The Chronicle cannot fault these Menzgold customers for going to the offices of the defunct company to remonstrate.

The Chronicle is, however, unhappy with the obvious attempt being made by the aggrieved customers to blackmail the government and force the latter to use the tax payers’ money to pay them their locked up funds.

Somewhere in 2017, the Bank of Ghana issued a public statement where it warned those transacting business with Menzgold to stop, because it had not been granted a licence to do so.

Though this statement was given wide publicity in both the newspapers and electronic media, these customers ignored the BoG directive. This forced the Central Bank to come out with another statement in December the same year.

The statement reads in part: We wish to notify the general public that in spite of the caution to Menzgold Ghana Company Limited to desist from solicitation, receipt of money and payment of dividends to its clients, the company is still engaged in these activities, contrary to section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

“The general public is hereby informed that Menzgold Company Limited is not licensed by the Bank of Ghana and has no authority to engage in the solicitation, receipt of money and payment of dividends to its client.

“Accordingly, the general public is cautioned that anyone who transacts any of the above mentioned business with Menzgold Ghana Company Limited, does so at his/her own risk, and Bank of Ghana will not be liable to such clients and depositors in the event of loss.”

With this second statement from the BoG one would have thought that enough notices had been given to the public, including Menzgold customers, to cease transacting business with the former, but that did not happen.

Though the majority of these customers are well lettered, they surprisingly went on a demonstration instead to support the operations of Menzgold. Because of the high interest rate they were earning on their investments, they threw caution to the winds and kept on doing business with the company until the Securities and Exchange Commission (SEC) ordered the shutdown of the gold-trading firm on Thursday, 12 September 2019.

The Chronicle finds it very intriguing that after adopting such a recalcitrant stance when the BoG issued the warnings, the customers have today come back to accuse the government of failing to protect their interests.

Having realised that the election is just around the corner, they have intensified their pressure on the government so that the latter would be forced to dip her hands into state funds to pay them. There are rules and regulations governing this country, and since the BoG had already come out to state that Menzgold was doing illegal business, any government official who would initiate the move to pay the aggrieved customers using state money would obviously have a question to answer.

The Chronicle is aware that attempts are being made to juxtapose the Menzgold issue with that of the collapsed banks and micro-financial institutions, but such juxtaposition, in our view, does not hold water. The collapsed banks were dully registered by the BoG, and that is why all those who saved with them got back their money.

Unfortunately, the same cannot be said about Menzgold, so using state funds to pay the aggrieved customers, we insist, will amount to wrong dissipation of state resources, and those behind it would have questions to answer.

We advise the Menzgold customers to file a civil suit against the owners of Menzgold for the recovery of their locked up funds, instead of mounting pressure on the government to pay them, which, in our opinion, will amount to an illegality.

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