All the banks in Ghana and the world over, are engaged in one Ponzi scheme or another, if the allegation that Menzgold was a Ponzi scheme is to be believed simply because it had to shut down, when asked not to take on new clients.
What the banks do is, what we will like to call ‘digging and filling’. They take deposit from one hand and give it to those making withdrawal in the other hand. They give depositors money to other customers by way of loan and charge interest, which does not benefit the depositor. They do not keep the monies in their vaults and keep to depositors upon request.
No bank in this world will survive and be able to pay back depositors funds, if depositors walk in one day to demand their money.
The explanation given by many panelists for saying Menzgold, was a Ponzi scheme, is that, the company went under because, the Security and Exchange Commission (SEC), stopped it from taking new deposit.
No company has ever survived, when it was asked to stop production, not to talk less a financial institution that does debit and credit.
A case in point is the GN Bank and Gold Coast Security Limited, own by Dr. Paa Kwesi Nduom, the bank failed to meet the new minimum requirement, as well as its inability to pay depositors, because everyone is walking in to withdraw their savings and close their investments.
It is from this perspective that we consider it disingenuous and ignorant, when commentators say Menzgold is a Ponzi scheme, because it has failed to pay its customers their principal.
We are persuaded that Menzgold, became a target because the finance Minister, Ken Ofori-Atta’s Databank, was on the verge of collapse.
It is an incontrovertible fact that many clients of Databank and other financial institutions have terminated their contracts with them and have directed their investments to Menzgold.
If not, why come hard on a company that, has never in a single month defaulted in meeting its obligation to its customers.
Menzgold, has no point in time said, it had a tree that grows money, they trade gold collectibles on behalf of the customers and share the profit with them, something financial institutions in this country, declaring profit after tax of over 140 percent are not doing.