Johannesburg - A Port Elizabeth-based company that claimed to be a foreign exchange services provider and four of its representatives have been ordered to repay a retired teacher the R100 000 she invested with the firm.
Deo Volente Empowerment and Trading, which traded as Capital Builder Investments (CBI), and company representatives Paul Louis Louw, Johannes Theodorus Otto, Denton Dean Henning and Paul R Johnson were yesterday ordered by the Ombud for financial advisory and intermediary services (Fais) Noluntu Bam to repay Margaretha Delport the amount she invested.
Delport was introduced by a friend to CBI, where she met Lombard whom she knew from childhood.
Louw made a presentation to Delport about their product and persuaded her to invest with the promise of an expected “30 percent growth”.
The funds were paid to CBI on February 29, 2008, but in 2011 Delport was told there was less than US$5 (R72) left in her account and the rest of her money was lost.
Delport then filed a complaint with the office of the Fais Ombud.
She said Louw told her 80 percent of the funds would be deposited in the Bank of Scotland and this amount was guaranteed and “perfectly safe”.
Dissatisfied
Delport said she was prepared to risk R20 000 of her money on foreign exchange trading, but was dissatisfied that CBI risked all her money and eventually lost it.
Delport in October 2011 sent in forms to redeem her funds, but from this point onwards did not hear from Louw or anyone else at CBI, found their offices locked and was unable to contact Louw.
Delport then saw Louw’s photograph in a local newspaper selling house and contacted him.
In a letter to her, Louw among other things said he had decided to close CBI as a business; the investments of many of the clients, including her account, were depleted; the fund manager had taken personal responsibility for what went wrong since November 2010; and he had been “stabbed in the back”.
Bam said neither Otto, Johnson nor Henning responded to any correspondence from her office.
Louw lodged an affidavit in which, among other things, he said Otto had the knowledge and expertise for foreign exchange trading, and that none of their clients had approached them for advice before investing in CBI, because it only had one product and that clients were warned that it was a high risk investment.
Bam said CBI was happy to take funds from anyone they could convince to invest. CBI also did not carry out any analyses of client needs to determine if their product was appropriate and clients, after investing, were not given accurate accounts of what became of their funds but instead were deliberately misled.
Bam said CBI failed to provide clients with information that was factually correct and traded funds contrary to their mandate and withheld this information from clients.
Their conduct was also in breach of the common law, the Fais Act and various codes, she said.
BUSINESS REPORT