We cannot use taxpayers’ money to pay blocked funds from institution ‘419’ – Bawumia

General news for Friday, October 23, 2020

Source: FM class

2020-10-23

The Akufo-Addo government will not use taxpayer money to pay depositors whose investments have been blocked in the now-defunct Menzgold Company Limited, Vice Chairman Dr. Mahamudu Bawumia 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 locked in some banks and specialized deposit-taking institutions that collapsed by their regulatory authorities on breaches and insolvency, Menzgold’s clients are not entitled to such bail-out as they defied all Bank of Ghana warnings to do business with a 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 repeatedly warns that people should not do business with Menzgold because they were not a licensed financial institution, therefore you cannot use the money from the taxpayers to pay blocked funds from an institution other than a licensed financial institution, “said Dr. Bawumia.

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

According to the aggrieved clients, they deserve a ransom since Menzgold was under SEC regulation.

In a press conference held on Sunday, October 11, 2020, clients blamed the government and the SEC for their difficulties and the death of some of their members.

They noted that the SEC and the government have disdainfully ignored SEC laws that protect them as clients of the ill-gotten gold trading company with a focus rather on instigating the public to ridicule them by calling them “greedy,” rather than insuring Get your money back from the business owner, Nana Appiah Mensah.

Clients say SEC laws require the Commission to include them “in its rescue exercise for clients of collapsed licensed institutions under the SEC, once the SEC admits that Menzgold’s operations were within its jurisdiction, for what they had the authority to issue a closing letter. “

Injured clients cited other reasons why it should be included in the rescue package.

They noted that: “The SEC authoritatively admitted that the Menzgold Company’s operations are under its jurisdiction when it wrote to the Chief Executive Officer of Menzgold Ghana Ltd on September 7, 2018, with the reference: SEC / DDGF / Menzgold / Vol.1 / 09-18 and in paragraph five, ordered Menzgold to immediately shut down the gold collectibles trading business with guaranteed returns for its clients and all publicity for the investment business was stopped with immediate effect. This directive caused an immediate run on Menzgold’s business and, subsequently, its collapse and collapse in the same month, leading to clients being locked out of hard-earned money for the past two years. Therefore, Menzgold falls under the category of unlicensed description under the laws of SEC Act 929. “

Additionally, “In all SEC investigations and directives to ensure compliance with Securities Industry Law, Menzgold clients expected the SEC to prioritize the protection of our investment with Menzgold under SEC Law 929. Second, they had to ensure that our funds were obtained by Menzgold without a license from the SEC and all clients are fully reimbursed. “

The group of aggrieved clients also stated: “Although the SEC has fully admitted in its previous letters that Menzgold was trading securities. Unfortunately, to date they have not provided Menzgold customers with any updates on their process and procedure to ensure that Menzgold will refund our money. “

He added: “Now that the SEC has bailed out the clients of licensing companies like CDH, First Banc, All Time Capital, Alpha Capital, Beige Capital and the like that regulated and collapsed with a written letter ordering them to close because they were operating against the terms of their license, Menzgold’s clients must also be bailed out by the SEC with the same amount of compassion, as they are not licensed, but are satisfactorily admitted that they are under SEC regulation, thus that the SEC also collapsed it with a written letter directing Menzgold to disconnect. “

However, according to the vice president, to the extent that Menzgold was not a licensed financial institution, taxpayers’ money cannot be used to bail out depositors.

Furthermore, responding to a criticism by former President John Mahama about why ¢ 21 billion GH was used to clean up the financial sector when all that was needed to save the nine banks that collapsed was ¢ 9 billion GH, the Dr. Bawumia said: “If GH ¢ 9 billion could have saved the financial sector, why not [Mahama] do it because it was under his mandate that all these problems began ”.

“You will recall that during the Mahama administration, I predicted, in 2015, that eight banks could collapse if they were not careful because that is what the data pointed to, since the banks were weak.

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

“Eighty-two microfinance institutions, including DKM, collapsed under John Mahama. Why didn’t he rescue them? I’m not sure that the deposits in those 82 institutions could be up to GH ¢ 9 billion. It wasn’t paying the depositors of those institutions, so when we arrived, some banks were on the brink of collapse and together with them, they were running the risk of collapsing the entire banking system, so we had to intervene.

“Some 4.6 million depositors had GH ¢ 21 billion in those banks, that’s why we used GH ¢ 21 billion to return their money. GH ¢ 9 billion would not have been able to pay the total deposits of the 4.6 million affected depositors. Depositors are 4.6 million, their deposits amount to GH ¢ 21 billion, so they could not have been redeemed with GH ¢ 9 billion unless they had spent GH ¢ 21 billion ”, emphasized the Vice President.