Stokvels fly as Wealth Hub reinvents itself
THE Wealth Hub, which shot to prominence in the past month as it attracted more than 20 000 members, was temporarily suspended this week after Business Times pointed to concerns that this popular new online stokvel may be a Ponzi scheme.
Members, jittery over the prospect of authorities shutting it down, flooded the Financial Services Board (FSB) and Reserve Bank this week with messages of support for the controversial scheme and launched an online appeal for its continuation. The petition was reminiscent of the reaction by members of the now-defunct Miracle 2000 pyramid scheme, which authorities shut down in 2000.
After initially shutting down, the Wealth Hub scheme was then relaunched on Wednesday as a “community stokvel”, with members no longer required to pay R295 to join the network or the R100 administration fee to enter the first level.
However, it appears that mem- bers will still need to pay a R3 000 administration fee later in the process. The scheme also still works on a pyramid structure, which requires 39 new members to join the scheme to pay someone above them in the chain.
The three founders — Ngoato Takalo, Stefaan Minnaar and Dr Lizette Kleynhans — are no longer responding to e-mails or answering their cellphones.
The online petition, supported by 2 505 people, reads: “We plea to you Reserve Bank and FSB to allow theWealthhub community stokvel to carry on doing its duties of changing lifes of fellow South Africans to a better living and there is no crime in doing that please. TWH 4ever!! [sic]”
Some members have invested heavily in the scheme, buying up to 20 “positions” in the first tier — forking out R8 000 to do so.
Meanwhile, competing stokvels began springing up this week in an apparent bid to lure away Wealth Hub members upset with the temporary closure.
Members, who asked not to be named, alerted Business Times GONE FISHING: Ngoato Takalo, the CEO of Wealth Hub to two others — The Millionaires hub stokvel, which on Friday only had 175 members, and stokvel Kipi Investments.
“We have never had problems with payment from Kipi,” said one investor on Wealth Hub’s Facebook site.
Kipi Investments, operated by Chris Walker — who was behind the Defencex scheme closed by the Reserve Bank in 2013 — is under review by the National Consumer Commission (NCC).
Efforts to contact Walker this week were unsuccessful.
The FSB, which has issued statements warning the public that both the Wealth Hub and Kipi Investments were not registered schemes, said it had seen a significant increase in pyramid-type structures that had created an impression they were registered with the FSB. Queries were forwarded to the Reserve Bank for investigation.
The Wealth Hub, on its Facebook page, has already distanced itself from schemes which are “luring our members away”.
This predicament highlights the legal vacuum governing stokvels. Organisations which call themselves stokvels and manage less than R100 000 of members’ money are not required to be licensed. Those with less than R30-million are required to be registered with a stokvel self-governing body recognised by the Reserve Bank.
A Wealth Hub member, who asked not to be named for fear he would not be paid out, said in an e-mail: “I have NO idea what is currently going on. There are no contact details, so you cannot phone anybody . . . at times you will see a post (on a website), that it is all systems go . . . But there is nothing definite.”
NCC spokesman Trevor Hattingh said it had not yet taken a decision on whether to investigate Kipi Investments or the Wealth Hub.
“We are still at the stage where we are gathering and reviewing the information,” he said.
Hattingh said there had been no attempt to define a stokvel, which has made the rapidly-expanding sector difficult to regulate. “The difficulty with this fluid state of affairs is that unscrupulous elements create schemes and, in order to evade regulation, they dub them stokvels,” he said.
More than a decade ago, Miracle 2000 mastermind Sibusiso Radebe was hailed as a messiah by supporters, before being found guilty of fraud and jailed for three years. Investors in his scheme lost about R30-million.