The Akufo-Addo government will not use taxpayers’ money to pay depositors whose investments have been locked up in the now-defunct Menzgold Company Limited, Vice-President Dr. Mahamudu Bawumia has said.

Dr Bawumia told Agya Owusu on Techiman-based Link89.1 FM in the Bono East Region during his recent tour that unlike the situation where the government rescued 4.4 million depositors whose funds got locked up in some banks and specialised deposit-taking institutions who were collapsed by their regulatory authorities over infractions and insolvency, the customers of Menzgold are not entitled to such rescue since they defied all warnings from the Bank of Ghana to do business with an unlicensed financial institution.

“Menzgold is not a licensed financial institution. We are talking about licensed financial institutions but if you set up your 419 institution and the Bank of Ghana warned repeatedly that people should not do business with Menzgold because they were not a licensed financial institution, so, you can’t use taxpayers’ money to pay locked-up funds of an institution that is not a licensed financial institution," Dr Bawumia said.

Two weeks ago, some aggrieved customers of the gold-trading company said they deserve a bailout just like the other companies that were licensed by the Securities and Exchange Commission (SEC) and collapsed with a “written letter” because their operations were contrary to their terms of license.

According to the aggrieved customers, they deserve a bailout since Menzgold was under the regulation of SEC.

At a press conference held on Sunday, October 11, 2020, the customers blamed the government and SEC for their plights and the deaths of some of its members.

They noted that SEC and the government have contemptuously disregarded the laws of SEC that protect them as customers of the defund gold-trading company with a focus rather on instigating the public to ridicule them by calling them “greedy”, rather than ensuring that their monies are retrieved from the owner of the company, Nana Appiah Mensah.

They customers say the SEC laws require that the Commission include them “in its bailout exercise for customers of collapsed licensed institutions under SEC, once SEC admits Menzgold operations was within its jurisdiction, upon which they had the authority to issue a shutdown letter.”

The aggrieved customers adduced further reasons for which it must be included in the bailout package.

They noted that: “SEC authoritatively admitted Menzgold company operations fall under its jurisdiction when it wrote to the Chief Executive Officer of Menzgold Ghana Ltd on 7th September 2018, with the reference: SEC/DDGF/Menzgold/Vol.1/09-18 and in paragraph five, directed Menzgold to shut down immediately the business of trading in gold collectibles with guaranteed returns to its customers and all advertising of the investment business halted with immediate effect. This directive caused an immediate run on the Menzgold business and subsequently its collapse and fold up within the same month leading to customers having their hard earn monies locked up for the past two years. Hence, Menzgold falls under category of the unlicensed describe in the Laws of SEC Act 929.”

Also, “In all SEC investigations and directives to ensure adherence to the Securities Industry Act, we customers of Menzgold expected SEC to prioritise the protection of our investment with Menzgold as per the SEC Act 929. Secondly, they were to ensure our monies obtained by Menzgold without license from SEC are fully refunded to all customers.”



The group of aggrieved customers also indicated: “Though SEC has fully admitted in their earlier letters that Menzgold was operating in securities. Unfortunately, till date they have failed to give customers of Menzgold any update on their process and procedure to ensure Menzgold refunds our monies.”

It added: “Now that SEC has bailout the customers of the License companies like CDH, First Banc, All Time Capital, Alpha Capital, Beige Capital and the likes which they regulated and collapsed with a written letter directing them to close down because they were operating contrary to the terms of their license, Menzgold customers must also be bailout by SEC with the same amount of compassion since they are unlicensed but satisfactorily admitted to be under the regulation of SEC for which reason SEC equally collapsed it with a written letter directing Menzgold to shut down.”

According to the Vice-President, however, so far as Menzgold was not a licensed financial institution, taxpayers’ money cannot be used to rescue the depositors.

Also, responding to a critique by former President John Mahama as to why GH¢21 billion was used in cleaning up the financial sector when all that was needed to save the nine banks that collapsed was GH¢9 billion, Dr Bawumia said: “If GH¢9 billion could have saved the financial sector, why didn’t he [Mahama] do that because it was under his tenure of office that all these problems started”.

“You’ll recall that during the Mahama administration, I predicted, in 2015, that eight banks could collapse if care were not taken because that is what the data was pointing to since the banks were weak.

“After making that prediction, they said we were lying and never took the warning seriously.



“Eighty-two microfinance institutions, including DKM, collapsed under John Mahama. Why didn’t he rescue them because I’m not sure the deposits in those 82 institutions could be up to GH¢9 billion. He didn’t pay the depositors of those institutions, so, when we came, some banks were on the brink of collapse and along with them, they risked collapsing the whole banking system, so, we had to intervene.

“Some 4.6 million depositors had GH¢21 billion in those banks, that is why we used GH¢21 billion to pay back their money. GH¢9 billion could not have paid the total deposits of the 4.6 million depositors affected. The depositors are 4.6 million, their deposits amounted to GH¢21 billion, so, you couldn’t have rescued them with GH¢9 billion unless you cough up GH¢21 billion”, the Vice-President stressed.