Menzgold to pay 50% of principal to clients

Gold-dealership firm, MenzGold Ghana Limited, has served notice that it will pay half of the principal invested by clients into the gold business.

This applies to customers whose deposits were made before 13 September 2018.

“In light of the many grievances displayed by an overwhelming number of our clients, the management of MenzGold Ghana Limited has taken a decision to pay out 50% of all Gold deposits in cash equivalent,” a statement from the firm said on Wednesday, 3 October 2018.

The release said the new directive has been taken “in order to appeal to our cherished clients and to minimise the impact of our suit on our customers, we urge that everyone stay calm as a new schedule will be out for those intending to terminate their contract and will be notified of when to come for the 50% of their initial principal”.

The statement added that the remainder of the principal will be paid at a later date.

“We urge that you be patient with us as we assure you that things will get better and you will receive the remainder of your principal, as time goes on…”.

MenzGold has filed a suit against the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC) for interfering with its Gold Vault Market operations.

In the suit filed at the High Court, Menzgold is seeking “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 the law by publishing any derogatory notices.”

The gold-trading firm is also seeking a declaration that its “business does not fall within the present legislated scope of the Banks and Specialised Deposit -Taking Institutions Act 2016 (Act 930)”.

Additionally, MenzGold wants a declaration its “business activities does not fall within the present legislated scope of the Security Industry Act 2016 (Act 929)”.

The BoG recently threw its weight behind SEC for shutting down Menzgold’s Gold Vault Market operations over certain regulatory infractions, a situation which the legal advisor to MenzGold, Kwame Akuffo, said smacked of unfairness.

In a recent press interaction, the central bank, which in the past issued several warnings to the public against dealing with MenzGold, said it endorses SEC’s move.