Ghana's top investment firm sees a spike in withdrawals; here's why (according to their CEO)

The Group Chief Executive Officer of Databank Kojo Addae-Mensah
  • Since September 2018, gold dealership firm Menzgold has not paid its customers their investment returns or principals.
  • This has affected another investment firm Databank.
  • The customers of Databank are panicking and therefore withdrawing their investment which is affecting the firm.

The Group Chief Executive of investment company Databank, Kojo Addae-Mensah, has said that the collapse of gold dealership firm Menzgold is having an effect on his firm.

He told Accra-based Starr FM that after the collapse of Menzgold, there have been some panic withdrawals by investors.

He explained that some of the customers fear that they will lose their monies just as it had happened to the Menzgold customers.

“What happened was that after the Menzgold issue, people were asking themselves where else they have investment and then they started withdrawing out of fear of losing it. We saw a spike in withdrawals. It was going up rather than the usual. This is out of the experiences they had elsewhere because they are unable to have access to their funds,” he said.

When asked what the investment firm will do to ensure that customers will trust them again, Mr Addae-Mensah said Databank will embark on confidence-building measure dubbed ‘Time with the CEO’ to assure customers that their investment is safe with them.

The Securities and Exchange Commission (SEC) ordered Menzgold to shut down its investment operations on September 12, 2018, for contravening the Securities Industry Act, 2016 (Act 929).

The SEC also cautioned Menzgold to stop advertising gold collectibles investment product which officered clients between 7 and 12 percent interest per month.

Since then, Menzgold Ghana has been unable to pay its customers both their interests and deposits. 

This has led to a number of demonstrations by aggrieved customers across the country.

Some of the customers have threatened legal action while others have appealed to the government to intervene so they can get their investments back. Meanwhile, other customers have petitioned the government to pay them their deposits just as it did for customers of DKM.

Meanwhile, the CEO of Menzgold Ghana Limited Nana Appiah Mensah (NAM1), is currently being held in Dubai for unrelated criminal offences. The Ghanaian authorities and the police are working to have him extradited to face separate criminal charges relating to fraud.

The aggrieved customers have been calling on Ghana’s President Nana Addo Dankwa Akufo-Addo to pay them their investment. However, the president has said that Ghanaians especially customers of Menzgold Ghana must learn the needed lessons from the ongoing saga.

 “As the authorities try to unravel the intricacies of the MenzGold saga I admonish Ghanaians to learn the necessary lessons, even as State institutions work to bring a resolution and those who indulged in criminal activities, are brought to justice.”

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