‘Illegal’ provider must repay client
In a recent determination, the Ombud for Financial Services Providers, Noluntu Bam, has ordered Motsoto’s Trading and Investment of Brakpan, Gauteng, its owner, Lucky Motsoto, and two managers, Zanele and Dolly Motsoto, to repay a client, Bheki Robert Mkhumbuza, the R65 000 he invested with the company plus reasonable interest. The ombud has also referred the matter to the police and to the South African Reserve Bank.
Mkhumbuza told the ombud that he had made two investments with the Motsotos in April 2013:
◆ R35 000, from which, he was told, he would receive 30 percent interest every 25 working days for three months; and
◆ R30 000, from which he would receive a 100percent profit payout after 75 working days.
He had received not a cent, either in returns or the return of his capital.
The company allegedly invested in high-risk securities. On investigation, the ombud’s office found that the company was trading illegally – it was not registered with the Financial Services Board (FSB) as a financial services provider and was using a false FSB number to mislead investors.
Bam concluded that it was unlikely any investment activity had actually taken place, and Mkhumbuza’s money had simply been stolen. – Staff Reporter