The Chief Executive Officer of Menzgold Ghana Limited, Nana Appiah Mensah, aka NAM1 has been picked up by officers of the Criminal Investigative Department shortly after he arrived in Accra at 11:00am, Thursday.
Police CID sources say the embattled Menzgold boss will be detained a few more days to assist with investigations on the collapse of his gold dealership business and how to refund monies to customers.
NAM1 arrived on an Emirates Airline after months of wrongful incarceration in Dubai, United Arabia Emirates where he had gone in pursuit of his company’s funds in December 2018.
His Lawyer, Mr. Akuffo, insisted he was not aware of any arrangements to arrest and detain his client.
Only last week, a Dubai court ordered Horizon Royal Diamonds to pay within three weeks, an amount of $39 million plus compensation for wrongful incarceration of NAM1 following a gold business deal between Menzgold and Horizon Royal.
The order followed an unsuccessful appeal by Horizon against an earlier ruling of the country’s high court to pay NAM1 his due for the supply of gold.
Thousands of customers of Menzgold whose investments have been locked up with the company following the revocation of its operations have been waiting with bated breath for Horizon to make good its liabilities to enable them receive their funds.
Background
On Sep 12 , 2018 The Securities and Exchange Commission (SEC) directed gold trading firm Menzgold Ghana Limited to shut down their investment operations with immediate effect for contravening the Securities Industry Act, 2016 (Act 929).
The SEC order also warned Menzgold to halt advertising of their investment business and desist from creating new contracts with depositors.
According to a letter addressed to the Menzgold CEO, Nana Appiah Mensah by the SEC and sighted by Graphic Online, investigations conducted by the regulator found that Menzgold’s business which involves the purchase/deposit of gold from the public and contracts issued with guaranteed returns with clients is a capital market activity which cannot be conducted without a valid license issued by the SEC.
The letter dated September 7 and signed by Paul Ababio, the Deputy Director-General of the SEC, warned that the failure of Menzgold to comply with the directive will lead to the SEC employing other relevant measures under the law to enforce compliance.
However, the SEC’s directive does not affect Menzgold’s other business dealings such as assaying, purchasing gold from small-scale miners and export of gold which is regulated by the Minerals Commission.
“The SEC has keenly followed and investigated the operations of Menzgold Ghana Ltd (hereinafter referred to as Menzgold) since 2017 including paying a working visit to the head office of the company on 23rd August, 2018 by some officials of the SEC to further understand the operations of the company where a meeting was held with Mr. Nana Yaw Offei, Commercial Manager and Rev. Derek Akubia, an adviser to the CEO,” a part of the letter reads..
“The interactions with Mr. Offei and Rev. Derek Akubia confirmed to the SEC the view that the aspect of Menzgold’s business which involve the purchase/deposit of gold collectibles from the public and contracts issued with guaranteed returns with clients is a capital markets activity (issuance of gold backed depository notes to the public) under ACT 929 without a valid license issued by SEC contrary to section 109 of Act 929 with consequences under section 2016 (I) of the same act”.
The SEC said Menzgold’s collaboration during their investigations does not make aspects of their operations any less illegal. It went on to describe Menzgold’s business operations as a threat to unsuspecting and uninformed investors.
“Subsequent to the visit by the SEC officials, a request for specific detailed information was made and Menzgold has through its lawyers agreed to provide the necessary information requested by the SEC within fourteen days. The provision of the information however does not make that aspect of Menzgold’s operations any less of an illegality under Act 929 as well as a threat to unsuspecting and uninformed investors.
“Accordingly, the SEC hereby directs Menzgold Company Ltd to shut down immediately the business of trading in gold collectibles with guaranteed returns to clients which constitutes, in essence, dealing in securities with neither the necessary license nor disclosures authorized by the SEC. No new contracts should be created and all advertising of the investment business halted with immediate effect”.
Read the SEC letter to Menzgold below;
