It has been a torrid week for gold dealership firm, Menzgold Ghana Limited with regards to regulators. Earlier in the week, Menzgold’s operations were rocked with a public notice from the Bank of Ghana warning the public not to deposit money with the company because it is not a deposit-taking institution.
The owner of Menzgold, Nana Appiah Mensah described the BoG notice which stated that his company is breaching section 6 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) as a joke and a diversionary tactic.
The BoG last year issued a statement cautioning the general public against depositing money with Menzgold because it has not been licensed to take deposits. The Securities and Exchange Commission (SEC) of Ghana also announced that the company has not been licensed to operate in the capital markets.
Nana Mensah is due to be questioned by the Economic and Organised Crime Office (EOCO) on Friday, August 17 but even before that, the Precious Minerals Marketing Company (PMMC) has said his company is flouting the laws of the land because it has no license to trade in gold.
The Managing Director of the PMMC which operates as Government’s assayer with the sole mandate of assaying all gold which leaves the country, says Menzgold’s license to trade in gold granted in 2014 was revoked because of the manner of their operations.
The PMMC MD, Kwadwo Opare Hammond has told myjoyonline that if Menzgoldis currently trading in gold then it is flouting Ghanaian laws.
He said: “The Minerals Commission would usually give you the license and there is a small clause that says ‘you buy gold for export’ and I don’t know if that is what they [Menzgold] are relying on to do this.
“Our records indicate that in the year 2014 they came for a license to buy and sell gold i.e. to trade in gold. But when they took the license from us it came to our attention that they were doing this kind of business in terms of asking people to come and invest in gold and get profit or dividend or interest, whatever they call it.
“When this came to our attention we called them and told them that is not the purpose for which the license was given to them and so they should stop but after several warnings written and verbal they still continued. So, we had no option than to revoke their license and I must say that by the year 2015 or so, the license was revoked and after that, we also published in the newspapers to let Ghanaians know that they do not have the license from PMMC to do the kind of business that they were doing.
As far as he is concerned, if Menzgold is trading in gold, then they are flouting the laws of Ghana.
“Certainly, it is because, you cannot trade, buy, sell or i.e trade in gold without a license from PMMC and I can say emphatically that as we speak to you now they do not have a license from PMMC,” Mr Hammond stated.
On whether Menzgold could trade under a license from the Minerals Commission
He said: “Well, I only heard yesterday from one of their officials. In fact it’s only yesterday that it came back to us that they were actually saying that they were buying and selling gold and then the official indicated that they have a license to buy and sell gold from Mineral’s Commission but I must say that for me it’s not right because Minerals Commission would normally give you a license to export and of course.
“I think there is a small clause that says that you buy gold for export. I don’t know whether that is what they are relying on to do this but if that is what they are relying on to do this then that is totally wrong. You are supposed to buy the raw gold and then you package then you export.
“Let me say that even with the exports no individual or company can export gold without coming through PMMC and that is what we have been charged to do and we are doing that, yes on a few occasions Menzgold have come in to export gold through us, the raw gold but again I want to emphasise that we have not, we who have been clothed with the powers to issue license for trading in gold have not given that to Menzgold as at now”.
According to the PMMC website, it was converted by Act 461 (Statutory Corporations Conversion to Companies Act) in the year 2000 to a Limited Liability Company to operate under the Ghana Companies Code (Act 179 of 1963) as Precious Minerals Marketing Company Limited with the same functions under the PNDC Law 219.
Its functions under PNDC Law 219, which was enacted to change the Company’s name to the Precious Minerals Marketing Corporation (PMMC) gave it the following functions;
- To grade, assay, value and process precious minerals
- To buy and sell precious minerals
To perform any functions conferred upon it by the Diamond Decree, 1972 (N.R.C.D. 32)
- To appoint licensed buying agents for the purchase of precious minerals produced by small scale-miners
- To promote the development of precious minerals and jewellery industry in Ghana
- To do all such things as are incidental or conducive to the attainment of its objectives and functions
Finally, in the year 2000, it was converted by Act 461 (Statutory Corporations Conversion to Companies Act) to a Limited Liability Company to operate under the Ghana Companies Code (Act 179 of 1963) as Precious Minerals Marketing Company Limited with the same functions under the PNDC Law 219.
The following has been the functions of the Company until 2016 when most of the functions changed as a result of the appointment of PMMC as the government assayor.
- Grading, assaying, valuing and processing of precious minerals.
- Buying and selling precious minerals
- Appointment of licensed buyers for the purchase of precious minerals produced by small-scale miners
- Production of jewellery
- To carry on trade and business whatsoever which can in the opinion of the directors, be profitable ancillary for the general business of the Company.
The company now operates as Government’s assayer with the sole mandate of assaying all gold which leaves the country. The jewellery production is also a subsidiary of the Company operating under the name PMMC Jewellery Ltd (PJL).
He also denied that Menzgold are the largest exporters of gold in the country as claimed by Nana Appiah Mensah.
“Well, that is not true. Our records does not show that they are the largest exporter, no. There are others who are doing far better than them. We at the end of every month do a league table to look at who is doing how much of gold exports and consistently they have been in fourth place or fifth place. That is what our records show”.
According to Mr Hammond, a conservative estimate of Menzgold exports over the last five months stands at $60 million.