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.