This weekend, another South African Investment scheme was exposed in the media. The latest investment scheme Global Africa Resource and Energy Corporation, involved selling unlisted shares to members of the public. Advisors selling these shares promised that they would increase substantially in value on the listing of the entity on the JSE.
The company received R74m of private investment funds according to the DTI. From this R24m was paid to the directors and a further R61m to brokers. The DTI said "only R299 061.89 was left" in the company’s bank account and no other tangible assets to distribute to shareholders.
Criminal complaints are being investigated against one of the key financial advisers who apparently made R4.5 million in commission from the sale of unlisted shares in the Garek scheme.
Detective Inspector Frans Burger of the commercial crime unit based in Pietermaritzburg confirmed on Friday that many complaints against André van der Merwe, who facilitated investments in the scheme, were being investigated.
Charles Pillai, the FAIS Ombudsman ordered Van der Merwe to repay a Pretoria couple their R40 000 investment in the scheme plus 15.5 percent interest on the invested. Van der Merwe's license to practice as a financial services adviser was withdrawn in November last year.
As I have mentioned many times before on Talk Money, if something sounds to good to be true it is highly likely to be a scam. There are many such schemes been offered to gullible investors. If you are approached by one of these schemes do not be tempted to buy in or you could be the next victim.
