In an interview with Accra-based Class FM, the Dean of Arts and Sciences at Ashesi University said the customers failed to pay any tax when they were receiving the outrageous interests on their deposits.
Prof Adei said that Menzgold “was a Ponzi scheme”, adding that “anybody who thinks that you will go to a financial institution and get 10% a month, 120% if you didn’t even compound them in a year, [is wrong] … And many people were warned individually and other things and they will say that: ‘If you are afraid you will not gain.”
“Those who got their profit, they spent it till the last minute. Some go and put all their monies back there again because now they have gotten GHS100,000, so, they go and put it there to get GHS200,000. When they were doing so, did they go and pay tax even? No. And now they want the government to rescue them with taxpayers’ money,” he added.
He wondered why the Menzgold customers continued to invest with the company with such huge interest rate when the gold price on the international market was not rising.
“It was something which no rational person should think that you can invest in gold or whatever and get 120% per annum while every day, the Ghana Broadcasting Corporation posts gold prices and there are no [significant] changes [in price].”
In his view, the Chief Executive Officer (CEO) of Menzgold Nana Appiah Mensah “was quite smart and most thieves and crooks are very smart. He saw a regulatory gap between the Bank of Ghana and SEC and exploited it.”
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.