According to Bank of Ghana (BoG) and Precious Minerals Marketing Company (PMMC), Menzgold is not licenced to buy and sell gold.
It has emerged that Menzgold’s business module of buying gold and subsequently advancing interests to investors in Ghana is in clear breach of its licence agreement.
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The licence agreement between the Government of Ghana and Menzbanc Ghana Company Limited [the parent company of Menzgold], which is in the exclusive possession of Joy News gives the strongest indication that the concerns of the Bank of Ghana, and the Precious Minerals Marketing Company (PMMC) may well be justified.
The relevant section of the Licence Agreement states the following:
“The company [Menzbanc] is hereby authorised to purchase gold locally from any person holding a small-scale mining licence (“small scale miner”) at the Company’s registered offices in Ghana and to export same in accordance with the terms of this Agreement.”
This has been interpreted to mean that the company can only do two things:
1. Buy gold but from only small-scale miners.
2. Export the precious stones.
This, therefore, raises questions as to whether Menzgold has power under the licence to engage in any trade in gold in Ghana in the manner it is doing.
In 2016, the Minerals Commission stated in a letter that the Minister of Lands and Natural Resources granted Menzgold a “License to Buy and Export Gold.” The license required that Menzgold “purchase gold from any person holding a small scale mining license and to export the gold.”
The letter continued: “The license also entitled Menzgold to register persons who would be certified by the Commission as licensed buying agents of Menzgold to enable them to buy gold on behalf of the company.”
During discussions with Menzgold, the letter reads, the company attempted its right to buy and export gold but the Commission maintained that their license would only allow Menzgold to buy and export gold to authorised persons. The Commission further advised that Menzgold abstain from any business activity involving the sale of gold to unauthorised persons.
The company has been fighting off pressure from the Bank of Ghana that it is operating an illegal venture. The central bank recently published a firmly-worded caution to the public, warning investors against making financial deposits in cash or via gold deposits with the company.
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The gold dealership states on its website that its gold trading platform offers 10% monthly return on investment, touting that it “has produced an unblemished 100% records since its inception last year…”
The public notice issued by the central bank stated that the company has no authority to engage in what it says are the “solicitation, receipt of money or investment and the payment of dividends or returns to its clients.” The central bank maintained that Menzgold is in breach of section 6(1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).
However, the gold dealership insisted in a rebuttal that its activities are restricted to allowing customers to purchase gold or deal in gold as an alternative investment. Menzgold has said in a statement that, “The Bank of Ghana is clearly aware that these activities are outside the scope of The Banks and Specialised Deposit-Taking Institutions, Act, 2016, Act 930.”