CBE obtains order freezing 9 accounts of alleged promoters of pyramid scheme
MBABANE – The Central Bank of Eswatini CBE has obtained an order free]ing banks accounts of nine alleged promoters of a suspected Chinese pyramid scheme, 4= $sset Management Eswatini .
The free]ing of the bank accounts of the alleged promoters¶ bank accounts held at )irst 1ational Bank )1B , 6tandard Bank /imited, EswatiniBank and 1edbank /imited, is pending an investigation carried out by the CBE into activities of 4= $sset Management Eswatini .
4= $sset Management Eswatini , according to the CBE, has not been incorporated in the .ingdom of Eswatini, but purports to be a subsidiary of a company that is said to be incorporated in the Republic of China.
The interim order was issued by -udge -ustice Mavuso yesterday and it also interdicts payments, and withdrawals, into and from the alleged promoters¶ bank accounts. This was after the CBE filed an urgent application, among other things, to interdict and restrain alleged promoters and the banks, where their accounts are held, from effecting any withdrawals and/ or transfers pending the finalisation of the investigation to be instituted by the CBE.
The investigation pertains to an alleged unlawful pyramid scheme that is purportedly being carried out under the name of 4= $sset Management Eswatini .
The alleged promoters of 4= $sset Management Eswatini are Cebile Mkhonto ± 6tandard Bank , 9usi Malubane
± 6tandard Bank , 1thabiseng Magongo ± )1B and /ungile 'lamini ± )1B
Others are .hetsiwe 6habangu ± )1B and
± 6tandard Bank , 6ibongile Mnd]ebele
± 6tandard Bank , 6abelo 'lamini
±6tandard Bank , 'ulcy Mhlanga
± )1B and 1dumiso 1yandeni ± )1B .
$ccording to the CBE, members of the public were paying substantial amounts of money into the bank accounts of the alleged promoters¶ bank of the suspected pyramid scheme.
The +ead of /egal and Board 6ecretariat at CBE, Refiloe Mamogobo, told the +igh Court that towards the end of $pril , the applicant CBE received information pertaining to an unlawful investment scheme that was being carried out by an unregistered entity by the name of 4= $sset Management 6wa]iland .
This company, according to Mamogobo, had not been licensed by either the CBE or the )inancial 6ervices Regulatory $uthority )6R$ .
6he said preliminary investigations, predominately investigations into online and social media platforms, revealed that the alleged promoters of the company were receiving deposits from members of the public in furtherance of the obMectives of 4= $sset Management.
INVEST
“The modus operandi is that the first to the ninth respondents promoters encourage members of the public to invest monies into 4= with a promise of a high return which is said to be up to per cent.
“The deposits are paid into the accounts of the first to the ninth respondent, who then transmit some of the funds to an unknown destination, presumably somewhere overseas. ,t is unclear as to why the amounts are being transmitted out of the country but what is evident, is that the first to the tenth respondent 4= are involved in unlawful deposit taking, even if it is for purposes of investment. We have also established that some depositors are able to make direct deposits through an application $pp ,” Mamogobo submitted.
The head of legal also told the court that they gathered from social media that 4= operated predominately from the 3eople¶s Republic of China, as well as in several other countries. 6he said fundamentally, however, it was operating in Eswatini unlawfully, in contravention of 6ection of the )inancial ,nstitutions $ct, 6ection
of the )6R$ $ct, which prohibits the conduct of deposit taking and/or investment schemes without a licence.
“,n view of the fact that 4= has not been licensed in the country, their activities are, therefore, unlawful. 8pon noting a spike in the unlawful activities of 4=, the applicant caused to be issued a formal notice to the first to ninth respondents and other persons who were identified as potential promoters, calling upon them to ‘cease and desist¶ their activities in terms of 6ection of the )inancial ,nstitutions $ct.”
The notice, according to Mamogobo, was served on the respondents through the local police. 6he submitted that the alleged promoters were contacted through their mobile numbers and reTuested to collect the notices from the Mbabane 3olice 6tation.
“)urther investigations revealed that notwithstanding the issuance and service of the notices, the respondents have not desisted from their activities and continue to take deposits from unsuspecting members of the public.”
Mamogobo argued that 6ection of the )inancial ,nstitutions $ct ),$ provides that no person shall carry on banking business in Eswatini unless he has been granted a licence by the Central Bank.
DIRECT DEPOSITS
6he told the court that alleged promoters violated this provision by taking direct deposits from members of the public, which constitutes banking business, within the definition in 6ection of the ),$.
The head of legal told the court that banking business was defined as ‘the business of receiving funds from the public through the acceptance of money, deposits of money payable upon demand or after a fixed period or after notice or any similar operation ...¶.
“By receiving deposits which are paid into their bank accounts, the respondents offend this particular provision. 6ection of the )6R$