'Ponzi' firm’s funds frozen

2019-12-20 14:21
Foto ter illustrasie....FOTO: ANDRE DAMONS

Foto ter illustrasie....FOTO: ANDRE DAMONS (file)

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The bank accounts of Pietermaritzburg-based investment company Supreme National Stock Holdings (SNS Holdings), an alleged pyramid scheme, have been frozen.

First National Bank was this week ordered by the Pietermaritzburg high court to state in an affidavit how much money is in these accounts. The company and its directors have also been interdicted from disposing any assets until a further court order permits them to do so.

The order was granted after some investors brought an urgent application. They feared that the directors were going to leave the country and go to Dubai. Following the granting of the interim order, more investors have joined the application. Now there are 321.

Sibusiso Mncadi explained in court papers how the company operated. Parties enter into a partnership agreement for the acquisition of trucks and trailers which shall be used as an income generating business venture for 24 months from the date of the agreement.

Sometime in October last year Mncadi was recruited by Sinegugu Dlamini to invest with the company. He was told about four kinds of investment packages.

The yellow package, which required R50 000 to receive monthly returns of R8 000 for 24 months; the orange package, which required an R85 000 investment and the returns were R15 000 a month for 24 months; the silver package of a R150 000 investment for returns of R30 000 for 24 months and the black package that needed R300 000 in return for R60 000 a month for 24 months.

Mncadi said he personally spoke to Sandile Sibiya — founder and director of the company — who said he is a registered investor on the Johannesburg Stock Exchange. Sibiya told him that he has transportation contracts with the mines. Sibiya, said Mncadi, explained how the investment worked and told him about the packages.

In February, he invested a total of R180 000 including registration fees.

In April he invested R150 000 in another package.

He said he had received various payments from the company since April. In October, the company sent a text message to all its clients saying there is no need for panic as the company is operational and has not closed its offices. The SMS said that the company has received a complaint from financial institutions claiming “infringement of a certain Banks Act thus forcing us to cease the partnership operations and refund clients”.

The company said it would be making refunds to its clients from November 1. New entrants would be paid first. On behalf of the company and Sibiya, another director — Nomaliso Sibiya — said that none of the directors intend to move to Dubai or anywhere else.

She said the reason for the SMS is that they found out that the business might be in contravention of the Banks Act, which is contrary to what they were previously told. As a result they decided to terminate the partnership contracts and repay the partners what was received from them and continue the business on their own.

She said the company bought 80 trucks, which are used at different locations to transport goods. Each truck carries about 35 tons, which amounts to R6 650 per return trip per truck. A truck can do eight to 10 trips a day and work about 20 days a month. That would amount to a gross income of R1,064 million to R1,3 million a month.

The application has been adjourned to a date to be arranged.

Read more on:    pietermaritzburg

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