“Menzgold heavily owes me too”-NAM1’s reply legally apt?


Nana Appiah Mensah popularly known as NAM1 said on August 5, 2021, that he does not owe customers whose funds are locked up with Menzgold; a company he set up.

He advised the customers to rather look up to the company for their locked-up funds. Shockingly, however, NAM1 also noted that his funds are locked up with Menzgold. To wit, Menzgold also owes him heavily.
NAM 1 posted on Instagram as follows:

The statement was contained in an Instagram post by NAM 1 in response to a customer who had earlier taken to Nana Appiah Mensah’s page to demand his locked up fund. This response infuriated many but may be legally apt considering the position of the law.

It does appear that NAM 1 was stating the long held position of the Law as established in the case of Salomon v. Salomon & Co Ltd [1897] AC 22 which was affirmed in the Ghanaian Case of MORKOR V KUMA (NO 1) [1999]DLSC450 to wit the Company is a separate legal entity distinct from its members. The debt of the Company is not the debt of it’s shareholder or officers of the Company.

In the context of this story the question one may ask is that “Will NAM1, a shareholder and CEO of Menzgold, be held personally liable for debt of Menzgold ?

A company limited by shares under section 7(2a) of Act 992 is a company that has the liability of its members limited to the number of shares unpaid and held respectively by them. People who sign up shares of a company are shareholders and when a company is duly incorporated, the existence of the company is separated from its shareholders.

The shareholder only enjoys certain rights with respect to the company and its operations. Once a company is incorporated under section 14 of Act 992, it becomes a limited liability company and gains the status of an artificial person who can manage its affairs, own properties, sue and be sued.

There may however be some exceptions to the principles governing the incorporation of a company and its existence as an artificial legal person. That is the circumstance under which the veil of incorporation will be lifted.

The effect of lifting the veil of incorporation allows a shareholder of a company, such as NAM 1, to be personally liable for acts done by the company. Some instances where the bill of incorporation will be when the company is set up as a sham or façade, or where the company is used as a vehicle of fraud by its shareholders.

Furthermore nothing prevents an individual who is a shareholder or officer of a company from doing business with the said company especially when there is no fraud or insider trading. So it may be possible for Menzgold to owe NAM 1 as well as other officers of the Company such as Bull Dog.

Based on the explanation above, unless NAM1 is held liable for fraud or established that he used Menzgold as a Sham by a court of competent jurisdiction, his post that the company owes him too may be legally apt although some may see it as morally obnoxious.

The focus of debtors who seek to attach liability to NAM 1 in person should be on gathering evidence to establish fraud or sham or other basis against NAM1 personally so as to permit or warrant the court to lift the corporate veil and attach liability personally to him.

For now there is no dispute of the debt liability of Menzgold but we are yet to see a decision of the court piercing the corporate veil of Menzgold and attaching personal liability to NAM 1.

Let’s see how the coming cases may pierce the corporate veil based on evidence to attach personal liability.