Sunday, February 17, 2013

Sharemax - Trevor Manuel failed Sharemax pensioners


Author: Julius Cobbett|
15 February 2013 13:30
Trevor Manuel failed Sharemax pensioners

In 2006 Deon Basson pleaded with Ministers Manuel and Mpahlwa to act on Sharemax.

JOHANNESBURG – In October 2006, journalist Deon Basson wrote to Trevor Manuel and Mandisi Mpahlwa, then the respective Ministers of Finance and Trade and Industry. The letter implored the ministers to do something about property syndication company Sharemax.

Basson did not receive a response to his letter.

When Basson sent his letter, Sharemax had sold syndications to the value of no more than R1.5bn. It was still in its infancy. By the time of its collapse, in September 2010, Sharemax had sold schemes to the staggering value of R5.5bn. The majority of investors are pensioners.

Sharemax’s two largest syndications, Zambezi and The Villa, were launched in 2007 and 2009 respectively. Investors poured a total of R2.3bn into these two projects – R756m into Zambezi and R1.590 into The Villa. These two schemes are also among Sharemax’s most toxic syndications. Fais Ombud Noluntu Bam recently described Zambezi as “nothing more than a Ponzi scheme”.

The obvious question is how Sharemax could continue, unchecked, for so long, when the ministers had been alerted to its alleged transgressions back in 2006.

It’s not as though Basson lacked credibility. Indeed, if there was any financial journalist worthy of the ministers’ attention, it was him. Basson had a formidable track record in exposing financial wrongdoing. He was also a six-time winner of Sanlam’s prestigious Financial Journalist of the Year award.

In March 2007, Basson again wrote to Ministers Manuel and Mpahlwa. His letter can be viewed here. The following regulators were copied on the letter: Errol Kruger, Registrar of Banks, Rob Barrow, chief executive of the Financial Services Board (FSB), Keith Sendwe, chief executive of Cipro, and Narain Kuljeeth, chief director, Office of Consumer Protection.

Basson wrote: “Since I have last corresponded with you, the serious regulatory and compliance issues raised in the Prakke report (attached hereto) had become more burning as a result of ongoing and further non-compliance by Sharemax Investments (Pty) Ltd.”

The Prakke report is an investigation conducted into Sharemax by forensic auditor Andre Prakke. Basson asked Prakke to compile the report to assist him in his legal battle with Sharemax. The 143-page Prakke report was comprehensive and damning. Prakke took particular issue with the investment structure through which Sharemax offered its attractive returns. Prakke argued that this structure was both unsustainable and illegal. He has since been vindicated on both counts.

Prakke says he received several threats of legal action, but never received a summons.

The full Prakke report can be downloaded here.

Basson wrote that there were worrying similarities between Sharemax and the failed Masterbond scheme. Basson concluded that the situation “calls for immediate action”.

Since October last year, Moneyweb has tried to get comment from Trevor Manuel – currently Minister in the Presidency – on Basson’s letter. Although our requests for comment were eventually acknowledged, no response has been forthcoming.

Moneyweb also asked the Department of Trade and Industry’s Narain (Babs) Kuljeeth, who was copied on Basson’s letter, whether any response was sent to Basson, and whether any action was taken. Kuljeeth’s response is produced in full below:

Dear Sir

Much has changed since then. I am certain that it was worked on. I do recall that the Legal Support and Prosecutions section of the Office of Consumer Protection dealt with the matter. I do recall that complainants were referred to the FSB. I also recall that in terms of the Consumer Affairs (Unfair Business Practices) Act, if a business engaged in prohibited conduct, then the Consumer Affairs Committee had no jurisdiction in the matter. It would be SAPS and the NPA.

The Director of Legal Support and Prosecutions has left the Department. I will try to contact him and ask for his input in this matter.

Please also note that today is my last day at the dti. It is not clear for how long I will be away. I will be assisting the National Consumer Commission for some time. I will contact you once I am there. Anyway, I doubt that I will ever escape an esteemed journalist as yourself. You will find me.

Warm Regards



  1. Slim vang sy baas ! " Clever Trevor " help ons nou asseblief om hierdie storie op te los sodat ons in Vrede kan Rus ! Ek het nie baie lank om te gaan nie !Ek is honger en siek. ek het geen inkomste nie . Kry asseblief vir Maria van Absa om hierdie mense "n lening te gee sodat hulle die Villa Monster kan voltooi en dit in 'n pragstuk te laat verander. Dit is jou konstitusionele plig as politikus om dit te doen. Hier is vit jou nou 'n goue geleentheid om jou aansien te kan verhoog onder die armes. Nie net die wat in Sharemax se onwettige skemas bele het !

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  3. Trevor was having a relapse from Johnny Walker's Black Label in 2006 when he received the letter and was not capable of any logic decisions.....

    Maria was placed at ABSA to make sure that pensioners did not have recourse to their investments, insurances & pensions.......

    It is a known fact that the BB and ANC insiders have a pact to stand together when it comes to 'redistribution' of past "Wealth"........OF THE WHITE POOR........

    The only one to come to the rescue of the old, frail & Pensioner's is DEATH, in the END!!