Hundreds of people gathered at the Allied Building on Timber Street on Thursday, lured by promises of huge payouts in a R5 investment scheme.
When The Witness arrived at the building on Thursday before noon, there was a long queue of people snaking upstairs from the second floor up to the Apmex offices on the fourth floor.
The Witness was approached by a man carrying a handful of the limited-edition 2019 Freedom R5 coins. In his pocket he had a stash of R100 and R50 notes.
The man said he was selling the limited-edition R5 coins for R200 but said he would give The Witness reporter a R50 discount.
He explained that one needs to have a R5 coin to make an investment with the Apmex company, and then pay an admission fee of R1 200 cash.
“You can use any coin to invest but this one [the 2019 Freedom R5 coin] gives you a bigger payout. If you give them this coin you will get a payout of R25 000 after 32 days. If you use the old coin you only get R5 500 payout after 32 days.”
The man said he had invested but told The Witness that he only got R5 500 because he used the old R5 coin.
“We can spend R1 200 in a week and still have nothing to show for it, rather take that money and put it towards something that could be bigger,” said the man while trying to convince the reporter to buy the coin.
When asked how he managed to get so many new R5 coins, the man said he had a brother who worked at a bank.
Another man told The Witness that this was his first time getting involved in these quick investments.
“My colleagues were pestering me telling me that they were getting paid because of these R5 coins so I also want to just try and see. Who wouldn’t want to make fast easy money,” he said.
Old and young men and women waited patiently in the long queue up the stairs. Many other R5 sellers gathered outside the building calling for people to buy the R5 coins from them for R150.
A concerned tenant in the building, who asked not to be named for fear of victimisation, told The Witness that the long queues were causing a disturbance in the building.
“The chaos that resembles Home Affairs queues has now been troubling other tenants from the early hours of the morning to late evenings. I wish this can be exposed before the scam hits the road and the people will come and burn the building, which is the main concern,” said the tenant.
Sbu Zuma, from Apmex, said telephonically the company was not a ponzi or pyramid scheme.
“Those calling our business a ponzi scheme are just spreading allegations unless they have investigated us and found something wrong with our business. We have also never had a client complaining about not getting their payout or us telling them stories. We always deliver on our promises,” said Zondi.
He said they were also not aware of any complaints of disturbances from other tenants at the building or the landlord.
“We do however apologise to the neighbouring businesses for any conveniences caused. We are aware of the long queues and are currently in talks with the building owner to find a more suitable space to run the business.
“We never foresaw that so many people would be interested when we started,” he said.
Explaining how the business operates, Zondi said they were collecting valuable coins and paying people for these coins.
“There are so many valuable coins in this country, but we chose to narrow it down and focus on all R5 coins and the old R5 notes.
“We are collecting these because in the near future they will be worth fortunes and we plan to proof them and trade them when that time comes,” he said.
Zondi explained that the 32 days waiting period was merely a way to create order and not an investment period.
“We use this period to transport the documents and the cash to our other offices and to verify the legitimacy of the coins given to us, plus we don’t keep huge sums of money at our offices. This is usually complete by two weeks, but we have a standard waiting period to avoid chaos,” he said.
Attempts to contact Zondi on Thursday afternoon via the cellphone number he provided to ask if they were registered with any financial body were unsuccessful, as the number went straight to voicemail.
'It is a definite scam'
A local financial adviser registered and accredited to the Financial Sector Conduct Association (FSCA), reckoned that the R5 craze was a “definite scam and the people behind it should be locked up”.
He advised any person to always deal with a registered, reputable financial company belonging to a registered, regulated society.
“I wouldn’t advise anybody to get involved in such an investment as it is not regulated by any body and will not fall under the ombudsman of the FSCA if anyone was to lodge a complaint or enquire about it.”
The financial adviser encouraged investors to always do their research before putting their money into any investment scheme and to ensure that the company or financial adviser has an FSCA licence.
In an attempt to unpack how the Apmex business works, the financial adviser said it makes no sense how an investor would pay in R1 200, plus the R5, and get a R25 000 payout after just 32 days.
“That return would be about 2 000%. How are they generating this money? Somehow, they have to generate a 2 000% return in a space of 32 days and also be able to pay their costs and commission.
“Quite honestly, it’s impossible. It’s a complete scam. Anyone going into this must be quite silly. How can you pay R150 for a coin that has a face value of R5? These people are being scammed twice.”
He warned anyone paying the R1 200 and R150 for a R5 coin was “throwing away” their money.