Johannesburg - A financial adviser who invested the entire life savings of a retired SA Police Service (SAPS) member against his wishes in Genesis Property Group, which was liquidated in 2009, has been ordered to repay the investor R800 000.
Genesis Property Group, a public property syndication scheme previously named Property Inter Action Group, was a Cape Town-based firm founded by Marelize Lombard. Its leadership apparently prided itself on running the company on “sound biblical business principles”.
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Compton Consulting and/or Daniel Johannes du Plessis, a representative of the firm, was ordered by the Ombud for Financial Services Providers (Fais), Noluntu Bam, to repay Henry Schmidt R800 000.
Schmidt alleged that between January and March 2000 he received a call from Du Plessis, who introduced himself as a financial adviser employed by Pentagon Financial Solutions and that he had been informed by the head office of the SAPS that Schmidt was about to take a retrenchment package from the SAPS.
Contacts
Du Plessis allegedly claimed to have contacts within the SAPS head office and offered his services to assist Schmidt to have his benefits paid out quicker.
He also suggested a meeting to discuss investment possibilities with Schmidt, who later invested R770 000 with Investec and received a monthly income of R7 000 over a five-year period until 2005. He suggested the funds be reinvested with Investec, but Du Plessis pointed him to a supposed better alternative, Genesis.
Schmidt claimed he was unhappy with this suggestion and told Du Plessis he wanted to be reinvested with Investec.
However, the investment was made in Genesis in August 2005, with Du Plessis signing all the papers on behalf of Schmidt and an amount of R840 000 was invested in Genesis with a projected annual return of 8.5 percent that had to be paid as a monthly income.
Schmidt continued to receive his monthly income until June 2008, when these payments abruptly stopped.
Schmidt said he was told by Du Plessis that income payments had been stopped due to mismanagement by the directors of Genesis.
Schmidt claimed he again asked Du Plessis to withdraw his investment, but was informed that the investment could not be withdrawn. He laid a complaint with the office of the Fais ombud and agreed to abandon the amount in excess of R800 000 to bring the amount of the claim within the jurisdiction of her office.
Bam said Du Plessis successfully “blindsided” Schmidt whether by intention or negligence to make the investment in Genesis.
She said that Compton Consulting and/or Du Plessis were not authorised at the time of providing the financial advice to provide financial services for unlisted shares and debentures.
There was no information suggesting Du Plessis carried out a due diligence on Genesis as required by the Fais code of conduct or that he complied with the code.
BUSINESS REPORT