Menzgold is facing mass withdrawals
Menzgold is facing mass withdrawals
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By Edmund Mingle

The regulatory dispute between gold dealership firm, Menzgold Ghana Company Limited, on one side, and the Bank of Ghana (BoG) and Securities and Exchange Commission (SEC) on the other, has reached its highest point towards a full blown legal tussle.

It begun over a year ago with regulatory issues between Menzgold and BoG over Banking and Specialised Deposit-Taking regulations, then SEC joined the impasse recently, directing Menzgold to suspend operations and abide by the Securities and Exchange regulations.

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It has already been a long tussle, characterised by accusations and counter accusations between Menzgold and SEC/BoG, and amidst varied public opinion and judgement on the matter.

Menzgold's CEO, Nana Appiah Mensah
Menzgold’s CEO, Nana Appiah Mensah

The SEC directive has led to ongoing panic withdrawals of “investments” by customers who want to ensure the safety of their “deposits.”

In the latest twist, Menzgold last week filed a suit at an Accra High Court challenging SEC and BoG over their capacity to regulate the company’s operations.

Already, the parties, especially Menzgold, are grappling with the cost of the impasse.

Experts indicate that the panic withdrawals and the suspension of operations, could lead to the collapse of Menzgold, while it will take a long time for BoG and SEC to recover from the public mistrust and negative perception they have suffered as a result of the dispute.

A legal tussle can only worsen the situation for the parties.

Dr Ernest Addison, Governor of BoG
Dr Ernest Addison, Governor of BoG

Mediation, undoubtedly, has become the best dispute resolution tool in the financial sector due to its high benefits in protecting investment interests and ensuring win-win situation for all parties.

Mediation, an Appropriate Dispute Resolution (ADR) Mechanism, has been used to resolve more complex disputes than the case of Menzgold, in the financial sector in many countries, including Ghana.

Menzgold and BoG/SEC could have avoided the impasse and the attendant cost if they had employed mediation, but the opportunity remains for the parties to opt for mediation.

Clearly the parties have entrenched positions and interests, which the Court hearing the case, would either affirm or reject, meaning that it will be a win or lose outcome for the parties.

But with mediation, Menzgold and BoG/SEC would be assisted to drop their arsenals and have a non-adversarial conversation to understand each side’s position and interests for them to formulate an amicable solution for the benefit of all stakeholders.

Rev. Daniel Ogbarmey-Tetteh, Director General of SEC
Rev. Daniel Ogbarmey-Tetteh, Director General of SEC

Compared to court litigation, mediation remains inexpensive, confidential, protects relationships and offers speedy resolution and both-gain outcomes.

Opting for mediation does not mean a party has a weak case, so Menzgold or SEC and BoG can call for mediation, which the courts are ready to grant.

Must Read:The importance of Translation in Mediation

It is not too late to avoid a legal showdown.

Mediation offers the opportunity for Menzgold, BoG and SEC to amicably settle the dispute without compromising on regulations and jeopardizing the interests of investors and customers.

VIAEdmund Mingle
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ADR Daily is a specialized news portal with a focus on providing authentic news, information and research analysis on Appropriate Dispute Resolution (ADR), Human Resource Management (HRM) and Industrial Relations Management (IRM) in Ghana and beyond. This platform serves as an information resource base for the progress of the ADR, HRM and IRM industries, and seeks to promote professionalism in ADR practice by supporting a network of ADR professionals within and across nations and continents. ADR Daily keenly encourages the mass adoption of ADR mechanisms, particularly negotiation, mediation and arbitration for the resolution of disputes in all spheres, through the publication of industry news and information, as well as by deploying innovative awareness creation engagements.