Legal counsel for gold trading firm, Menzgold, has stated that the company’s operations are not regulated by any law.
Kwame Akuffo in an interview on Joy FM’s Midday News, however, said the company cannot be blamed for the lack of a legislation to legalise their activities.
“Our business is not regulated by law. It is not regulated by the Securities Exchange Commission (SEC) or the Bank of Ghana (BoG). It is a formidable innovative product that has been put out there.”
Menzgold is incensed by a directive from the SEC on Wednesday, ordering it to suspend their operations with the public with immediate effect.
A letter issued September 7, 2018, the Commission said, it has found, following investigations into Menzgold activities that the firm does not have the license to trade in gold collectables from the public.
The Commission further stated that it has interacted with representatives of Menzgold and has come to the conclusion that the aspect of Menzgold’s business which involved the purchase and deposit of gold collectables and guaranteed returns, is a capital market activity under Act 929 without a valid license issued by it.
The statement added that subsequent requests have been made by SEC to Menzgold’s lawyers to furnish SEC with specific detailed information on the operations of the firm.
But Menzgold feels unfairly treated by SEC and the BoG.
Kwame Akuffo speaks for Menzgold
Mr Akuffo is baffled that the company is being targeted and made to look bad when indeed there is no law whatsoever that speaks against what it does.
Citing the emergence of the internet, the lack of laws to control it in the beginning and how societies have now modeled rules to control its use in recent times, he said the same should be done for their business.
“If you look at the Banking and Specialised Deposits taking Act and the Securities Industries Act, there is a provision which says the regulators are entitled to prescribe regulations for any other business model that arises or as they find fit.
“So when there is a legislative omission, you don’t come and blame Menzgold,” he added.
Related: Panic withdrawals hit Menzgold
According to Mr Akuffo, Menzgold has on many occasions asked for the regulators to establish an instrument to regulate them, but all that went unheeded.
In the absence of a law, however, the legal practitioner said people are entitled to use their ingenuity and intelligence to come up with innovative products.
“We don’t’ cripple ingenuity,” he said.
He added that, had the BoG been forward thinking and proactive, the SEC will not be acting in the manner it has towards Menzgold.
Related: Menzgold bows to SEC pressure; halts gold vault market services
For him, the BoG, faced with its own legislative omissions, is stretching language trying to get some implied power to deal with their innovative product.
Mr Akuffo stressed that Menzgold has no problem being regulated with the appropriate laws but will not take the BoG’s attitude to destroy businesses.
“The framers of the law knew that innovative products will come into the market which will not have regulation and that is why it gives them the power to regulate it but it does not give them the power to stretch existing legislation to cover things which have not yet been regulated.”
In his view, it is not for nothing that Sections 4 and 6 of the Banks and Specialised Deposits Act make room for things that will come up, but are yet to be regulated.
“Don’t blame young men who are trying to use their ingenuity and intelligence to set up economic ventures. You don’t do that.”
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