A businessman was duped into investing R420 000 in a non-existent mobile coffee franchise, the Bellville Specialised Commercial Crime Court heard on Thursday.
Mtunzi Malunga testified at the trial of Michael Anthony Crause, that he, his wife and children were “totally taken in” by Crause.
Crause has pleaded not guilty to three counts of fraud and one of reckless or fraudulent trading.
The State alleges that he had started proceedings to close down the business when Malunga was persuaded to invest in it.
Malunga told the court that he had just sold one of his business interests, when his accountant introduced him to Crause, who was selling franchise opportunities in his mobile coffee enterprise.
He felt “comfortable” about investing in the franchise because it had a head office in the upmarket suburb of Melkbosstrand.
The brochure he was shown claimed the mobile units sold coffee everywhere, including major sports meetings.
Crause assured him that whatever appeared in the brochure was true, and that he was the owner of the business, Malunga told the court.
“The fact that the business was established in the year 2007, according to the brochure, gave me the assurance that Mike had been in the business for some years already.
“Mike said he had a team of people to do the marketing, and to give franchise-holders national representation.”
This was why he had decided to invest in the mobile coffee franchise, Malunga said.
The case continues on Friday. - Sapa