Embattled gold dealership firm, Menzgold Ghana Limited, says it has reached an agreement with its customers to scrap the payment of dividends to them.
The agreement is said to have been reached at a crunch meeting between Menzgold, customers and stakeholders on October 7, 2018 at Korkdam Hotel.
According to information gathered by DAILY GUIDE, there would be no payment of dividends as earlier suggested.
“During the said meeting held around 3 pm, it was generally agreed that due to the challenges faced by the company and the fact that customers are no longer interested in dividends, it was wise to scrap the dividends,” a statement from Menzgold said.
The meeting, held between the board, management of Menzgold and customers numbering over 100 from all branches nationwide, was said to have been chaired by the Board Chairman of Menzgold Ghana Limited, Nana Yaw Offei, Corporate Manager, as well as Menzgold International Consultant.
It would be recalled that in September 2018, the Securities and Exchange Commission (SEC), urged Menzgold to pay extra values on its customers’ gold deposits.
In an interview with the media in Accra, SEC’s Deputy Director-General, Paul Ababio, indicated that the Commission has not stopped Menzgold from paying its existing clients their dividends on the gold vault market investment.
According to Mr. Ababio, SEC’s directive was for Menzgold Ghana Limited “to halt doing new business.”
But the company contended that it was unable to pay dividends due to the suspension of its operations by SEC.
In a statement issued by its management at the time, Menzgold Ghana Limited explained that “the gold collectibles offered for trade by patrons of our gold vault market product are subjected to our quality controls and traded for profit which is shared as extra value with the product owner or trader.”Menzgold Ghana pointed out that “any act, order or instruction, therefore, designed, or decreed to forbid Menzgold from trading makes it impossible to generate any revenue whatsoever out of which extra values are charged and paid to those entitled.”
But the company’s response to SEC’s directive angered several investors, forcing many to picket at its office in Accra.
The Coalition of Independent Investors Ghana (CIIG), at the time, also registered its displeasure with Menzgold’s ‘refusal’ to pay dividends to its members.
In a statement signed by its Convener, Mohammed Ismail, CIIG indicated that its attention had been drawn to the issue that management of Menzgold Ghana Limited has “deliberately” stopped payment of dividends to existing customers and that of those whose agreement had expired since August 2018.”
According to CIIG, “Menzgold’s refusal to pay our members who are customers of their firm, in pretence to not understand the simple directive of the SEC, has brought untold hardship, leading to a complete breakdown of economic activities of some of our members.”
However, DAILY GUIDE understands that it was agreed at the meeting that every customer would now be paid back their principal either matured or not matured.
The paper gathered that the principal payment would commence by close of October, and it would take a 90-day period for Menzgold to pay fully all its customers.
“A reasonable percentage should be calculated and paid to customers by way of their principal. ie: say 20% to 50% of customers principals will first be paid starting few days from now and the rest of the balance on principal will be paid in 90 days. The 90-day period starts from tomorrow. Within this period all customers are expected to receive their full principals.”
“Menzgold has chosen between two worst case scenarios…to shut down completely for 90 days and not pay anyone till after the 90 days when they will return to pay fully, every customer’s principal or to pay some percentage to cushion customers while they still open to work till all the principals are paid in full within 90 days. Customers chose the latter, it added.
The board and management of MG conceded that they failed in their communication with customers and have taken immediate measures to address these lapses.
The company has insisted that no one will lose a cedi.