The Securities and Exchange Commission (SEC) of Ghana has taken action against Nyak-City Hostels Limited, a company incorporated in 2025, for offering investment products without the required licence. The company operates an investment product known as "Treasury Hostel Investment", which claims to offer a better alternative to a treasury bond and promises investors guaranteed lifetime returns from investments in hostels over a period of 60 years.
Deputy Director General of the SEC, Mensah Thompson, stated that the Commission remains committed to sanitising the investment sector and protecting the renewed confidence in Ghana's financial industry. He emphasized that the SEC would no longer wait until investors lose money before taking action against entities suspected of operating without the required licence.
According to Mensah Thompson, the SEC had received intelligence on Nyak-City Hostels Limited's activities and moved to shut down the facility before investors could potentially suffer losses. The Commission is concerned about businesses hiding behind real estate to offer investment services to the public without the requisite licence.
The SEC's action is part of its efforts to protect investors and safeguard confidence in Ghana's financial sector. Mensah Thompson stressed that investment products offered to the public must be licensed, vetted, and scrutinised by the regulator to ensure that investors are adequately protected. Licensed investment products also provide regulatory and resolution mechanisms that can be activated if something goes wrong.
The Commission has invited representatives of Nyak-City Hostels Limited to its offices to begin discussions on the matter. For now, the SEC has taken a lenient action by shutting down the facility rather than making arrests. However, further enforcement action, including possible arrests and prosecution, could follow if necessary.
The SEC's move is aimed at preventing entities from undermining confidence in Ghana's financial market at a time when confidence is gradually returning to the financial sector and the broader economy. The Commission will continue to take action against unlicensed investment operators to protect investors and maintain trust in the financial sector.
The shutdown of Nyak-City Hostels Limited serves as a warning to other entities operating unlicensed investment schemes. The SEC urges the public to invest in regularized products that have been vetted, scrutinised, and approved by the regulator to ensure their safety.
Key points
- The SEC shut down Nyak-City Hostels Limited for operating an unlicensed investment product.
- The company's "Treasury Hostel Investment" product promised guaranteed lifetime returns from investments in hostels over 60 years.
- The SEC remains committed to protecting investors and safeguarding confidence in Ghana's financial sector.
