‘Charity fundraiser’ closes

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iol news pic U-Care logo

Pietermaritzburg - Charity fundraiser U-Care has closed its doors, after the Supreme Court of Appeal (SCA) dismissed its appeal against an order that it cease operations.

In May Pietermaritzburg High Court Acting Judge Kobus Booysens found U-Care was wrongfully operating as a bank, as alleged by the Registrar of Banks. He interdicted U-Care from operating.

U-Care, the trading name of Corpclo 2290, and Corpclo 2297, trading as DMP Marketing, appealed the ruling.

SCA Judges Lex Mpati, Carole Lewis, Francois Malan and Eric Leach and Acting Judge Brian Southwood dismissed their appeal.

U-Care members paid R125 monthly Ä later R165 Ä into a Corpclo account with 60 percent returned to members in the form of commissions and bonuses.

Another 20 percent was paid to the managing company, Corpclo 2297 for administration expenses, and the final 20 percent was paid to charity.

Members nominated a charity upon joining the scheme.

Once 20 nominations had been received, that charity received a donation.

Commission was paid to members who persuaded others to join, with four levels of reward in a tiered structure.

To qualify for a commission, a member had to have three members per level. Similar arrangements were made for clubs of members.

Southwood said the appellants claimed it was a transparent fund-raising business inspired by altruism.

In its first two years, U-Care received almost R15 million in donations and in the next three-and-a-half years over R60 million. It distributed funds monthly, giving charities a regular income.

The appellants claimed they were serving both donors and charities.

But they did not provide information about the donors and their contributions, or the information on charities who benefited, the amounts they received, and the commissions paid.

U-Care had not received approval from the department of trade and industries, Southwood said. - Sapa

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