Menzgold saga: Lawyers for victims petition parliament over locked-up funds
Lawyers representing victims of defunct gold dealership firm Menzgold Limited, have petitioned Parliament to intervene in dealing with Ponzi schemes in Ghana.
Amanda Clinton and Bianca Clinton are asking parliament to work with the Attorney General (AG) to freeze local and international assets of Menzgold CEO, Nana Appiah Mensah, and his three directors to pay clients who invested in the gold scheme.
Additionally, the lawyers want parliament to work with the Attorney General’s department to “enact separate legislation dealing with Ponzi/pyramid schemes”.
Furthermore, the lawyers are requesting specialist guidelines to the AG, the Securities and Exchange Commission (SEC), National Security, Interpol, CID, NIB, Office of the President on the fight against Ponzi schemes.
“By not dealing effectively with criminal enterprises and individuals, the credibility of public institutions is marred both locally and internationally and ironically,” the petition highlighted.
“It is an open invitation to future criminals since government maintains its position that it can do nothing for those who invested in an unregulated company (whilst admitting that the company fell under their remit but somehow remained unregulated and open for business for years without sanction or adequate consequences),” they explained.
Menzgold customers, in an attempt to reclaim their lost deposits, dragged government to court over what it describes as the state’s failure to protect them against a Ponzi scheme.
About 28 of them are seeking a civil claim of ¢11 million in reliefs.
The lawyers are carrying it further to the legislature and argue that if parliament works with the Attorney General’s Department to follow suit with other countries and actively pass legislation dealing with Ponzi/pyramid schemes, this is another way of addressing the Menzgold matter.
With capital market activities not endorsed by SEC, Menzgold was thus caught by Securities Industry Act, 2016 (ACT 929) “but mysteriously remained unlicensed for close to 5 years”.
The lawyers are of the view that the Attorney General’s department has a host of effective mechanisms at its disposal, including the ability to seek swift ex-parte injunctions to preserve financial assets in the public interest.
Facts of Menzgold case
The facts of the case, as presented by ASP Slyvester Asare, were that in October 2018, the police received a complaint from about 16,000 people that Menzgold had convinced them to invest GH¢1.68 billion in a gold purchase scheme that yielded 10% monthly interest.
According to the prosecution, the complainants said their money was locked up and that they could not find Nana Appiah Mensah and the other principal officers of the company.
The prosecutor said investigations revealed that Menzgold and Brew Marketing Consult were incorporated as limited liability companies in 2013 and 2016, respectively.
Menzgold, he said, obtained a license from the Minerals Commission in August 2016 to purchase and export gold from small-scale miners, and that in order to successfully engage in the business, Nana Mensah founded Brew Marketing Consult to be a gold buying agent.
ASP Asare said although Menzgold was licensed to purchase gold, it was not licensed by the Minerals Commission to trade in gold.
Notwithstanding the lack of such a licence, he said, Menzgold went public after its incorporation and invited the public to deposit money for a fixed period with interest, on the pretext of gold purchasing.
The prosecutor said further investigations revealed that the three accused persons were the directors and principal officers of Menzgold and Brew Marketing Consult.
Nana Appiah Mensah was released from police custody on August 17, 2019, after meeting his revised bail conditions.
Earlier, the court had varied the bail conditions to allow for five sureties to guarantee his bail without showing evidence of having properties worth the GH¢1 billion bail sum.
The court, however, refused a request by counsel for Nana Appiah for a reduction in the bail sum from GH¢1 billion to GH¢20 million.
The court had ordered, on July 26, 2019, that three of the five sureties should show justification, meaning they must show proof that they had properties or interests worth the GH¢1 billion bail sum.
As part of the bail conditions, he is also to report to the Ghana Police Service every Wednesday.