25%-a-month investment scheme flourishes

SPECIAL INVESTIGATIONS

Author: Julius Cobbett|
26 June 2013 23:35




Scheme accepts money from greedy and desperate, while regulators look on.

JOHANNESBURG – A 25% a month investment scheme is flourishing with no apparent intervention from authorities. Zantech Trading is a Durban-based business with satellite offices in Sandton, Newcastle and Port Shepstone. Its website invites investors to “become a shareholder at Zantech Trading, and earn 25% in dividends monthly for a period of 12 months.” That’s a return of 300% a year.

Zantech trading first appeared on Moneyweb on March 14 this year in an article that highlighted dubious investment schemes. At the time, Moneyweb reported that none of the schemes mentioned were registered with the Financial Services Board (FSB). I warned that anyone who invested with the schemes should be prepared to lose their money.

Moneyweb first alerted the South African Reserve Bank (Sarb) to Zantech Trading on March 7 this year via its pyramid scheme tip-off e-mail address: sarb-banksup@resbank.co.za. The tip-off was not acknowledged, which is the case for most of the tip offs I send to that address.

On March 13, Moneyweb contacted Manasse Malimabe, head of the FSB’s Fais compliance department. Malimabe replied: “Our investigation into Zantech Trading has found that the company is not a registered Financial Service provider, and the product they offer falls outside of the regulatory net of the FSB. As such we have referred the matter to the SARB for further investigation as there are indications that the company may be operating a pyramid scheme.”

Thus the relevant regulators have been well aware of Zantech’s activities for at least three months, and yet no obvious action has been taken to prevent the scheme from accepting money from new clients.

The FSB does confirm, however, that the Reserve Bank has appointed inspectors to look into the Zantech matter.

I receive regular queries from readers relating to Zantech. Here are some samples of e-mails received:

“I just want to confirm if this above mentioned company is also a scheme, because my younger brother is saving money to invest in this company next month.”
“Thanks for the above information. I recently became a shareholder with Zantech (no returns as yet)...and after reading the above , am now considering withdrawal but am also in need of money. I'm really confused. I need your advice please.”
“Can I have your advice then, so do you think to join Zantech trading is not a good option? I know more than five people now who are investing in this company, and they are getting a lot of money. I was thinking of joining, but after reading on Moneyweb, I am not sure at all.”
“Hi Mr Cobbett, I just heard about Zantech trading, but I remember you once wrote about it. But now I’m scared it’s not legal. How do I check this? The person introducing me to it said it was investigated at the same time with Defencex but it was found to be legal. But I can’t just take anyone's word. I think it’s better to ask you because I believe you know more about financial stuff.”



Naturally all readers were advised to steer well clear of Zantech.

On Wednesday morning a draft copy of this article was sent to Reserve Bank head: strategy and communications department Hlengani Mathebula with the invitation to correct possible factual errors or offer comment before 5pm the same day. The Reserve Bank acknowledged the invitation but had not responded by 5pm.

The Reserve Bank invites people to report suspected illegal deposit-taking (pyramid or Ponzi) schemes to sarb-banksup@resbank.co.za. Alternatively call 0800 677 772 or SMS the Primedia Crime line on 32211.

Topics: ZANTECH TRADING, RESERVE BANK, FINANCIAL SERVICES BOARD