R70 mln charity con halted

2011-05-03 00:00

THE high court in Pietermaritzburg has shut down a local multi-tiered organisation that solicited charity donations and kept more of the money than was given to charity.

The Registrar of Banks brought the application against the fund-raisers Corpclo 2290, trading as U-Care, and Corpclo 2297, trading as DMP Trading. The registrar alleged, and the court found, that they were trading illegally as banks.

Michael Ollemans, managing director of U-Care, opposed the application and said that for years the managers believed they were trading legally.

Their intention was to create a transparent charity funding model and practice that could raise and distribute funds and touch more lives than other organisations. Since the start they had donated more than R13,8 million to charities.

In reply to a question put by acting Judge Kobus Booyens, the counsel for the respondent, advocate Fanie Slabbert, said they had collected between R65 million and R70 million.

Advocate Michael Blackbeard, deputy director of banks, denied that the fundraisers were legitimate. He said they operated a multi-tiered structure that asked the public to make monthly contributions to U-Care, whose members are referred to as “independent contractors”.

As an example Blackbeard cited how a minimum monthly donation of R125 was split:

• 60% paid to members as commission and/or bonuses

•20% paid to Corpclo 2297

•20% paid to charity.

Blackbeard said the respondents could not say that they “raise money”and then deny that they are soliciting money and/or persons for introduction to their business models.

Booyens ruled that the respondents had traded illegally as banks and ordered that they pay costs.

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