Lawyers for troubled gold dealership firm, Menzgold Ghana, say the company cannot comply with a directive by the Securities and Exchange Commission (SEC) to shut down its trading activities for alleged infractions.
The company says it finds the “directive to shut down or suspend its operations untenable and is unable to comply with the terms” of SEC “especially considering the contagion and the effect on the market and its Customers.”
The company’s response issued by law firm Kwame Akuffo & Co Unlimited, acknowledged an earlier letter by SEC demanding responses to a number of issues raised against the company, and says Menzgold had requested for a two-week extension to respond adequately to those issues.
SEC, according to the lawyers, were silent on the request, and which silence Menzgold had interpreted to be acceptance, only to be hit with the directive to close down.
“We therefore find it unfortunate, that without waiting for the said time to lapse, nor giving our Client any notice whatsoever, but in an unhealthy overreach, you sent to our Client a letter with a heading which states “Notice to Suspend Trading without Licence”.
While the heading of the said letter indicates a purported suspension of trading without a licence, the content, however, speaks of a direction that our Client’s business should be shut down.
The contradictions in your directive are for you to resolve, and it makes your intentions difficult for our Client to understand or comply with.
“Be that as it may, we are instructed to respectfully inform you that our Client’s business module which is essentially that of the sale of gold collectibles is not one that falls within your regulatory regime.
Please be informed that our Client is not issuing any “tradable Note” as you erroneously state in your letter of 7th September,2018!
“Our Client is willing to respond to the queries raised in your letter of 27th August 2018, and would like to respectfully request that you furnish it with the provisions of the Securities and Industries Law that its business and objects fit into and what it requires for the purposes of a License if any.
This request is without prejudice to the rights of our Client.
“Again, our Client reiterates that it is not engaged in Capital Market activities, and neither does it issue gold-backed depository notes.
“Under the circumstances, we are instructed to inform you that our Client finds your purported directive to shut down or suspend its operations untenable and is unable to comply with the terms of your letter dated 7th September, 2018 especially considering the contagion and the effect on the market and its Customers.”
The lawyers however say they are available to meet with the industry regulator or for discussions to resolve this impasse.