South African Reserve Bank : SARB launches campaign to warn consumers of risks associated with Ponzi and Pyramid schemes
06/28/2012 | 03:07pm US/Eastern
The South African Reserve Bank (SARB) has launched a national awareness campaign to warn consumers of risks associated with illegal deposit-taking schemes, sometimes also referred to as Ponzi or pyramid schemes.
The campaign encourages members of the public to report any information on these schemes to a dedicated email address or to report it to the Crime Line number.
Speaking at a media briefing held in Johannesburg today (Thursday, 28 June) Hlengani Mathebula, Group Head of Strategy and Communications at the SARB cautioned the public against illegal deposit-taking schemes.
"These schemes hook the public by convincing them of the high returns in a short space of time. This poses a risk because they tend to collapse when it becomes difficult to attract new investors, or when a large number of investors cash out. The schemes involve payment of purported returns to existing investors from the funds contributed by new investors. Through this process, illegal deposit-taking schemes promise investors that they will gain high returns if they invest in these funds.
Mathebula says various such schemes have been probed by the Bank Supervision Department of the SARB in the recent past.
"My appeal to all is to speak to an accredited financial service provider before investing and to report any suspected Ponzi and pyramid schemes to the South African Police Service or the SARB."
Mathebula also called on all banks in South Africa to support the campaign and to work with the SARB to publicise key campaign messages.
Campaign elements are primarily radio and print to create awareness in respect of Ponzi and pyramid schemes. The campaign message is Beware of oMashayana. If it sounds too good to be true, it probably is. Speak to your Bank or an authorised financial services provider.
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.
Enquiries:
Hlengani Mathebula
Group Head: Strategy and Communications
+27 12 313 4210
+27 82 448 9219
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Regulate the Regulators
Sharemaxing the high life....Why is there still No Prosecution in the Sharemax case ??????
The Scuba Scene
High Court applications in Egypt and South Africa, criminal charges and threats of more criminal charges, a luxury lodge . .more development in Mozambique, a Reserve Bank investigation into millions leaving the country and a tycoon’s yacht floating in the Red Sea.
These are the ingredients of yet another chapter unfolding in the Sharemax saga as the riches of the two top managers of the failed and beleaguered property syndication are being exposed.
Revelations of the wealth of former managing director Willie Botha and marketing director André Brand also come in a week that a Free State farmer prepares to apply for the liquidation of the R5bn Sharemax group.
Farmer AC van Zyl of Hoopstad says in his North Gauteng High Court affidavit that he invested R3m in Sharemax’s two biggest property syndications, The Villa and Zambezi Retail Park.
He says the syndications of both The Villa and Zambezi were illegal and have failed. There’s no money to repay him or any of the other investors – as the Reserve Bank has ordered, so the liquidation of Sharemax is the only option.
The liquidation application was due to be heard this week.
Focus shift
While many Sharemax investors are coming to terms with the fact that they’ve lost most, if not all, their investments in Sharemax, the focus has now shifted to the dazzling wealth that Botha and Brand have walked away with in the face of devastated and in some cases, impoverished shareholders.
Botha is fighting battles on all fronts.
Brand has also accused Botha in writing of pocketing R9m of investors’ interest – although he quickly withdrew the statement after Media24 Investigations started asking questions.
Besides his Sharemax woes, Botha is also embroiled in a bitter feud with the man who built his ultra-luxury yacht and who says he invested millions in the yacht as well.
Peet Gericke, owner of Scuba Scene diving in Pretoria, has also gone to war with Botha, accusing him of breach of contract and claiming that Botha intimidated him. He has laid charges at the Brooklyn police station in Pretoria.
At the heart of their dispute is the 43-metre Scuba Scene yacht thought be worth between R120m and R150m, which is owned by Botha’s family trust.
Gericke says he built the luxury yacht over more than four years and that he owns a substantial share.
Dirty laundry
Not so, says Willie Botha, who claims on his yacht’s website that Scuba Scene is fully-owned by the Willem Botha Family Trust. The website, which showed Botha and friends frolicking and diving on the yacht during a recent Red Sea holiday, was this week promptly removed from the web.
The yacht’s Facebook page detailing the feud between Botha and Gericke was removed. Finweek was, however, able to retrieve a copy of the page which gives a fascinating insight into the dispute.
Gericke says his battle with Botha has resulted in four High Court applications in Pretoria and two in Egypt. Litigation continues unabated.
Gericke confirms that he’s been visited by Reserve Bank investigators looking into millions that left the country through his accounts for the construction of the yacht. Much of the money came from Botha, he says, adding the investigators left with a substantial volume of documentation.
Gericke has also consulted with a private investigator in Pretoria, who in turn handed a pile of documents to Willie Hofmeyr, head of the Asset Forfeiture Unit.
Threats of liquidation
On the Facebook page, the Botha camp claims to have loaned R600 000 to Gericke and says if he doesn’t repay the Botha Trust in December, they will liquidate him.
Botha and his advocate visited Egypt in October and say they laid fraud charges against a business partner in Egypt.
The Scuba Scene yacht, which boasts 13 en suite cabins, a crew of 14 and the finest finishes, has been locked down in Hurghada in the Red Sea (see pictures).
Although Gericke still advertises dives from the Scuba Scene on his firm’s website, he confirms that the boat is no longer operational.
Botha also claims that he holds a 50% shareholding in Jupitrax, which owns the Scuba Scene shop in Menlyn Park in Pretoria and a multi-million rand resort development in Mozambique.
Gericke is busy developing the luxury Praia Paraiso coastal estate in Ponta Do Ouro in southern Mozambique. If Botha’s claim to own half of Jupitrax is correct, it would mean he also has a stake in the Praia Paraiso developments, which offer fractional ownership.
Meanwhile, questions are being asked about Brand’s accusation against Botha that the latter had illegally pocketed R9m of investors’ money in October 2009.
Documents pertaining to this payment are now in the hands of the Hawks.
Unanswered questions
Finweek has pieced together the events surrounding the money, and despite assurances by Botha – and suddenly Brand – that there was nothing illegal about the payment, questions remain.
Brand wrote a memo to Botha on 7 July claiming he was owed R24.5m in unpaid commission. He claimed that between March 2007 and February 2011 Botha had earned almost R50m in commission from Brandberg Investments, a property company that does business with Sharemax.
This money does not include the commission they earned from selling shares worth R5bn over 10 years to 40 000 investors.
Brand said he only got around R7m from Brandberg and demands another R24.5m from Botha. Botha claims he never received the memo.
Brand’s claims come after he started an investigation to trace commission that he thought he should have received from Botha but never did.
One of the people he visited was Capicol MD Paul Kyriacou. Capicol was the developer of Zambezi Mall and The Villa. Kyriacou confirmed that he’d told Brand about the R9m he transferred to Botha in October 2009.
“I notified André Brand about this and gave him a copy of all the documentation many months ago,” Kyriacou said. He claims it was for his share in a company he sold to Botha and that there was nothing illegal about it.
Cash up-front
But Brand didn’t agree and wrote the July memo.
Enter Wietz Lourens Nell, a Pretoria businessman who buys and sells property. Brand wanted to get rid of his game farm near Thabazimbi in Limpopo Province, valued R79m according to a 2010 auditor’s report.
Nell found a buyer, and Brand signed a letter agreeing to sell the farm for a mere R21.5m. But, according to Nell, he wanted cash.
The sale never materialised but, says Nell, Brand asked him to help him get his money out of Botha and he gave Nell the July memo.
At around that time, Brand realised that the R9m payment from Capicol to Botha might be questionable. On 26 October he wrote to Botha distancing himself from the transaction saying the money had been wrongfully transferred from Capicol to Botha’s helicopter company.
Brand wrote: “These funds should be transferred to Sharemax for purposes of an interest payment.”
Brand also gave the memo to Nell, who in turn passed it on to the Hawks and the lawyers now bringing the liquidation application. He also made an affidavit about his dealings with Brand, now in Media24 Investigations’ possession. The Hawks will not comment on their investigation.
When Media24 Investigations approached Brand and Botha for comment last week, Botha refused to entertain any questions.
However, at midnight last Friday, both responded by saying that they had spoken to one another and that Brand was withdrawing any allegation against Botha and that he was now satisfied that the money was paid legally to his former business partner.
Brand never denied that the memos were authentic, simply that they had been obtained “dishonestly”.
- Jacques Pauw ( Finweek )
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