Investors face financial ruin
THE outlook is bleak for scores of locals who invested large sums of money in a company that has stopped paying out promised returns.
The Zululand Observer has obtained a list of 66 names of people who ‘loaned’ money to Biz Afrika 1928 (Pty) Ltd, trading as Status Finance and are collectively still owed at least R13-million.
They have been notified by an attorney that the company is ‘reviewing its financial status with new auditors’.
While the attorney states that the directors have every intention of paying back the money and will in due course issue a schedule of payments, the casualties are not buying this.
Indeed, the letter sent by the attorney to Status Finance investors states: ‘The loans attract exorbitant rates of interest, which are far beyond the legal rates permitted in terms of the National Credit Act and other relevant legislation.
‘The extremely high interest rates levied on the loans are contra
bonos mores (against public policy), not permissible in law and therefore unenforceable.
‘The after-tax income of the company is not sufficient to allow continued payments of the excessive interest to the lenders.’
Case opened
Meanwhile, the exact number of known investors is growing and the figure could well rise to more than 200 according to one stakeholder.
Acting Richards Bay SAPS Station Commander, Col VC Pillay, said a case of fraud has been opened for investigation.
‘I can confirm a complaint was lodged and a docket has been opened.
‘Given the amounts involved, the case may well receive intervention by the Commercial Crimes Unit in Durban.’
Without reference to this particular case, Col Pillay said there has been a noticeable increase in the number of fraud cases.
‘It is imperative that people check out any company they invest with to ensure they meet all the legal fiscal requirements and are licensed to provide the financial service they offer.
‘Again, we warn people that if extraordinary returns are being offered they ought to be cautious.’
Penniless
One investor said she and her husband had paid in a capital amount of R700 000.
‘We were promised R35 000 per month and in fact did receive this for five months.
‘Then came the bombshell of the attorney’s letter.
‘I can tell you this has left many pensioners penniless and brokenhearted. They have lost everything and some will be forced to sell their houses to survive.
‘We have gathered names of others who are owed and in addition to the criminal case, we have hired attorneys for a class action civil case.’
According to records in the ZO’s possession, two of the named investors – many of them ‘friends and acquaintances of the directors’ - paid in more than a million rand each, the highest amount being R1.6-million.
More than 20 invested well over R100 000. Some of these are prominent businessmen.
They all now wait anxiously for the criminal and civil investigations to unfold over time, hoping against hope their money will indeed, be paid back as promised.