Ahead of Tomorrow’s Crunch Meeting; Lawyers Angry
Gold trading firm, Menzgold, has rejected an attempt by the Securities and Exchange Commission (SEC) to set conditions for a planned meeting between the two parties tomorrow.
SEC, had in a letter suggested it was not going to reverse its decision to shut down the company; the lawyers of Mensgold are unhappy about. Analysts have said, SEC might have ulterior motives for shutting down Menzgold.
Many suspects Bank of Ghana (BoG) is acting through SEC to protect various commercial banks, which had seen huge withdrawal by depositors to do business with Menzgold.
Already, Consolidated Bank, formed from the collapsed five banks, is struggling to survive and everything, including downsizing the number of employees, is being done to make the bank work and be profitable.
The development comes after the state regulator in a statement agreed to a meeting request by the trading firm, but said the meeting will only take place under the following condition.
“The commission will be available to meet with your client on Tuesday September 18, 2018 at 2pm on condition that the information we requested for in our letter dated August 27, is provided by the close of business day Friday September 14, 2018,” the regulator said.
But in response, lawyer for Menzgold Kwame Akuffo, in a letter dated September 14, 2018, stressed that even though they would attend the said meeting, they will do so without conditions from SEC.
“..Your letter therefore raises fundamental questions as to the fairness of the decision you took on September 7, as well as whether same was premature, adding “Be that as it may, we are willing to attend a meeting with you at 2pm on September 18, 2019 without any conditions attached to same”.
Menzgold, with business interests in London, Spain and Nigeria, has engaged the services of UK and Wales based law firm, Baker & McKenzie LLP, to join forces with their local counsel, Kwame Akuffo & Co. Unlimited to take up its current spat with the SEC.
The Commission on September 7, directed Menzgold to suspend its trading activities, because it was not licensed to do so, a decision that has engendered bitter discussions and panic among the company’s investors.
But the law firm has in a letter dated September 14, 2018 and addressed to the Deputy Director-General of SEC, Paul Ababio and copied to the Chief Executive Officer of the Minerals Commission, served notice it would in the next few days, set out why it is convinced that Menzgold, has done no wrong to deserve a shutdown of its operations.
On the contrary, Baker & McKenzie says it “strongly believes” Menzgold is “fully in compliance with all aspects of the laws of Ghana including, without limitation, the Securities Industry Act 2016.”
“The Company will, as a demonstration of good faith and willingness to fully cooperate with the SEC while this matter is resolved, desist in these specific activities outlined in the SEC Communications.
“This voluntary and temporary cessation of these alleged activities is without prejudice to the Company’s legal position nor any acknowledgement of wrongdoing in any way. It is a simple gesture of good faith to give all pause for consideration of the technical legal issues and to allow its lawyers to fully engage with the SEC on this matter.”
The SEC has set up a conditional meeting with Menzgold for Tuesday, September 18 to resolve issues arising from the directive to shut down, but SEC insists it will only meet with Menzgold if the latter provides some information requested of it.
“The Commission would be available to meet with your client on Tuesday, September 18, 2018 at 2:00pm on condition that the information we requested for in our letter dated August 27, 2018 is provided by close of business Friday, September 14, 2018”, said the SEC in its letter of September 13.
Meanwhile, Mr Kwame Akuffo, is raising questions about the fairness of SEC’s suspension of trading directive, saying the decision is also surprising and seemingly premature.
In a letter to acknowledge receipt of SEC’s letter announcing Tuesday’s meeting, Kwame Akuffo, says it appears SEC, having taken the decision to suspend Menzgold’s trading activities, is now asking for the information that should have guided its decision to suspend or not.
“You will recall that pursuant to your letter dated September 7, 2018, in which you took a decision to shut down our Client’s business, we wrote to you requesting for a meeting to resolve the issues arising therefrom.
“It is instructive to note, that in paragraph 4 of your letter dated September 7, 2018, you stated;
“Subsequent to the visit by the SEC officials, a request for specific detailed information was made and Menzgold has through its Lawyers agreed to provide the necessary information requested by SEC within fourteen days. The provision of the information however does not make that aspect of Menzgold’s operations any less of an illegality under Act 929 as well as a threat to unsuspecting and uninformed investors.“
“Indeed, you were absolutely clear that the said “information” was completely irrelevant for purposes of your decision. It was without receipt of this “information” that you proceeded to order a complete shutdown.
“It is therefore a matter of surprise that we are now being told that we are to furnish you with “information” that you did not consider relevant and above all were emphatic that the said “information” would have had no bearing on your decision to shut down our Client’ business.
“It is settled practice that decision makers such as administrative bodies and the Courts which take decisions affecting the rights of others do not as a general rule receive evidence after a decision has been given. On the facts of this case, you have specifically informed us that the “information” does not matter.
“Your letter therefore raises fundamental questions as to the fairness of the decision you took on September 7, 2018 as well as whether same was premature. Under the circumstances, it is difficult for us to reconcile the contents of your letters dated September 7, 2018 and September 13,2018.”
He concluded his protest, however, on an unconditional willingness on the part of Menzgold to attend the Tuesday meeting.