More than 700 people stand to lose more than R200 million in investments after an investigation into the southern Cape-based Minne Trading investment scheme found it to be operating illegally.
The Registrar of Banks appointed auditing firm Deloitte to determine whether the company and two individuals, Graeme and Caroline Minne, were conducting the business of a bank, in contravention of the Banks Act. Investigators found that the business was receiving deposits from people and was thus operating as a bank. At the end of November, the business was told to stop taking investments and to repay all its investors.
The organisation had been promising investors returns of between 48 and 65 percent. The investigators found that while some investors were receiving these payments, “they never realised payments and were operating at a loss”.
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“In practice, this means that Investor B’s investment was used to pay the return on Investor A’s investment.”
The company was apparently involved in training, and in the trading of foreign exchange. The inspection revealed that the company “did not nearly generate enough profits on the forex market to pay the returns promised to investors”.
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