Finance Minister, Ken Ofori-Atta has stressed government has no intention of bailing out customers of beleaguered gold investment firm, Menzgold Company Limited.
The former Chairman of the Databank Group, revealed that some staff of his Ministry and the Bank of Ghana (BoG) who are financially literate invested heavily in gold-trading firm despite warnings that the firm was unlicensed and unregulated.
The minister explained the profile of Menzgold customers shows financially literate people who ought to know that the gold dealership firm is “an obvious trap”.
Speaking at the 20th-anniversary ceremony of the Securities and Exchange Commission (SEC) on Wednesday, 21 November 2018, Mr Ofori-Atta said: “I think it is not in the place of government to fund or get your money back for you. It was an obvious trap that you went into. Maybe we as an industry should also push the whole issue of education and empowerment so that people do not fall prey to that,”
He added: “As we try to clean up the financial services centre, I know the SEC has come down hard, strong and justifiably on Menzgold. But the issue with a company of Menzgold, as I look at the Ministry of Finance and I see some people who are at the Ministry of Finance who have invested there, I look at the Bank of Ghana and I see some people who have invested there and rarely and of course the military etc., so, it becomes an issue of greed as a people and our own behaviour, when we are so clear as educated as we might be that when we went there, there was no license.”
He pointed out that the red flags are obvious because Menzgold cannot sustainably promise to pay 10% monthly returns on gold collectibles when returns on the international market ranges between two to three percent.
Ken Ofori-Atta applauded the efforts of the Securities and Exchange Commission for coming down “hard and strong and justifiably” on Menzgold.
Menzgold has been unable to pay its clients their dividends due to an ongoing battle with SEC and the BoG over its operations.
While the state institutions say the company has not been licensed to take deposits, Menzgold insists it does not take deposits and does not answer to the two institutions.