Pan-African mys­tery

Finweek English Edition - - Cover -

THIS SELF-PRO­CLAIMED pan-African con­glom­er­ate is the mother of all un­listed ven­ture cap­i­tal projects, col­lect­ing by far the largest amount of funds from in­vestors – al­beit in var­i­ous guises (in­clud­ing RSI and MA­TRIC).

A re­cent in­ves­ti­ga­tion into Garek by in­spec­tors from the Depart­ment of Trade & In­dus­try drew some shock­ing con­clu­sions and stopped just short of call­ing Garek a scam. The DTI es­ti­mated a to­tal of R74m was col­lec­tively raised from pub­lic in­vestors through RSI, MA­TRIC and Garek. Judg­ing by the DTI re­port Garek isn’t nearly worth as much as R74m, which means in­vestors could stand to lose ev­ery­thing.

More im­por­tantly, the DTI re­port re­vealed a num­ber of du­bi­ous cor­po­rate prac­tices – in­clud­ing sell­ing shares to the pub­lic without a prospec­tus, not is­su­ing au­dited fi­nan­cial state­ments and us­ing por­tions of funds raised from in­vestors to pay com­mis­sions on the sale of shares.

Fin­week man­aged to con­tact Garek in a bid to of­fer the com­pany a chance to re­spond to the DTI’s re­port. De­spite fol­low­ing the com­pany’s re­quest to sub­mit ques­tions in writ­ing, no re­sponse had been re­ceived from Garek at the time of go­ing to press.

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