An MP with the governing New Patriotic Party Alexander Kwamina Afenyo-Markin has warned that government could suffer political backlash if people lose their monies in an investment firm believed to be operating illegally.
The firm, Menzgold Dealership, was directed to shut its gold operations after a regulator, the Securities and Exchange Commission said it was operating without a licence.
Menzgold has since escalated its fight with the regulator to the law courts after weeks of media banter.
Anxious customers including pensioners, politicians, pastors, senior security officials and bankers have been told by the company that they cannot retrieve their capital but can expect dividend payments.
Menzgold invites those with gold collectibles to deposit it at their vault with a mouth-watering promise of at least 7.5% returns monthly.
In effect, within a year, a client could make 90% returns on investments and at most 120%, a promise which SEC believes is – in the least – risky.
Discussing the matter on influential Joy News political analysis show Newsfile Saturday, the NPP MP Alexander Afenyo-Markin, reminded the government of the political fall-out between a regulator and a defiant investment firm.
“If a state institution responsible for some of these issues does not take steps to address the issues…and there is any matter arising thereof, the people of Ghana will blame the government and it is the government that will suffer”.
The politician and lawyer referred to a similar circumstance in 2015 after several clients of microfinance companies lost their investments estimated in the millions.
This was after the central bank, Bank of Ghana, withdrew the licence of companies like DKM Microfinance for violating the Banking Act, (Act 2004).
The liquidated company had liabilities of about ¢605 million taken from more than 87,000 depositors across the country. Several angry clients rushed to court to obtain orders to sell off some of the companies’ properties.
Angry customers vented against the Mahama government demanding their monies back. President Mahama blamed BoG for failing to properly supervise financial institutions.
A customer and businessman Kwasi Addae, owner of Micky Enterprise at Berekum in the Brong Ahafo Region, died after learning ¢600,000 will not be refunded as his name was not part of a validated list of DKM customers.
What began with DKM later engulfed several other microfinance operations like God is Love, Mckeown Microfinance Limited, City Trust, Ezi Access Microfinance, Agape Micro-finance, First Unity Microfinance Limited and Golden Life Microfinance Limited.
The impact of the crisis spread from the Brong Ahafo to the Upper West and Volta Regions where branches of these companies were cited.
DKM Bolga demo
In the political fallout that followed, the NPP snatched seven seats from the NDC in the Brong Ahafo region. “We as a party benefited in opposition from it,” Afenyo Markin recalled the advantage.
The Akufo-Addo government is still facing pressure from aggrieved customers to pay back their funds as he promised ahead of the December 2016 general elections.
He said Menzgold saga can have implications on the economy if not handled well. The company has been operating for the past five years.