Menzgold Saga : Gov’t cannot use taxpayers’ money to pay locked-up funds of unlicensed, ‘419’ institution – Bawumia

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Vice-President, Dr Mahamudu Bawumia has indicated that government cannot use taxpayers’ money to pay depositors whose investments have been locked up in the now-defunct Menzgold Company Limited.

“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 told Agya Owusu on Techiman-based Link89.1 FM

The Vice President was in the Bono East Region during his recent tour of the part of Ghana when he made such remarks.

He hinted 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 warning from the Bank of Ghana to do business with an unlicensed financial institution”.

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 licence.

Lawyer for Menzgold customers threatens to sue state over locked-up funds

Lawyer for Menzgold customers, Amanda Clinton has announced her intentions to issue a civil suit against the state over the locked-up funds of her clients.

Ms Clinton threatened to sue the Criminal Investigation Department (CID), the Security and Exchange Commission (SEC), Bank of Ghana (BoG), the Minerals Commission as well as the Attorney General’s department next month.

In a lengthy letter signed by Ms Clinton dated Thursday, 22 October 2020, she indicated that the Menzgold issue is of public interest because most Ghanaians are affected, hence it should have been closed down long ago.

Parts of the document stated: “The Menzgold matter though deeply unfortunate and preventable, may be an opportunity for Ghana to define in court the extent to which government institutions owe a specific class of investors a duty of care if the State fails to intervene in terms of shutting down a white-collar criminal enterprise at the earliest possible opportunity instead of much later when most clients invested from 2017 onwards.

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