By Edmund Mingle
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| Menzgold is grappling with mass withdrawals |
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.
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.
The SEC directive has led to ongoing panic
withdrawals of “investments” by customers who want to ensure the safety of
their “deposits.”
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| Dr Ernest Addison, Governor of BoG |
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.
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.
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| Menzgold's CEO, Nana Appiah Mensah |
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.
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| Rev. Daniel Ogbarmey-Tetteh, Director General of SEC |
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.
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.
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.
