Adriaan Niewoudt, the man behind Kubus, the notorious rotten milk pyramid scheme that took South Africa by storm in the early 1980s, has launched a new money-making venture.
This time it's not rotten milk, but kaolin, a type of clay. He calls it Kibus. And the new scheme also involves people recruiting others in pyramid style.
Pyramid schemes are illegal in South Africa. But Nieuwoudt insists this scheme is legal because it involves a real product, kaolin.
Back in the 1980s, Nieuwoudt raised millions of rands through his "milk culture" project and thousands of South Africans fell for it, furiously buying the mixture of cheese and milk culture from Nieuwoudt, "growing" it in glasses and then drying it into a powder to re-sell to Nieuwoudt and recruiting others to do the same, in a classic pyramid scheme.
At the time Nieuwoudt claimed that he needed vast quantities of the dried powder to develop a skin cream product. However, there never was such a product and investigators found that the milk culture was simply a cover for a pyramid scheme. Tons of dried milk-culture were found rotting in a shed.
The pyramid scheme finally collapsed and Nieuwoudt was sequestrated. He was found guilty of diamond theft and illegal diamond dealing in the 1990s and sentenced to eight years in jail.
He served only a year before being released.
Nieuwoudt, who lives on his farm Rondawel near Garies in Namaqualand, claims his new scheme is "totally above board" and will create hundreds of jobs for unemployed poor people.
"I want to be remembered for something other than rotten milk. I have learnt a lot from my mistakes. With this project I hope to empower thousands of people. I have discussed it with legal experts and auditors and I am confident that it is completely legal."
Nieuwoudt says he has a huge high-grade kaolin deposit on his farm. Under the Kibus project he wants to "give" away 45 percent of this deposit to the people of South Africa.
"Look, we need money to develop this R3-billion deposit. If I register a public company with shareholders and I have to compile a prospectus in terms of the stock exchange rules, it will cost a fortune.
"I also can't just give away shares in a public company. So I have established the Kibus Association. People can now register as members. Each person who registers has to supply us with their ID number and other details such as where they live and so on.
"When they register, they get 10 points. The more information they give, the more points they get. Of course for every new member they bring in, they get more points.
"It costs R50 to register as a member. This money covers administration and other costs such as advertising to publicise the project. All the members are recorded on our computer data base.
"Membership entries close on June 30. Thereafter auditors will go through the data and at a later stage Rondawel Kaolin CC that holds the kaolin deposit, will become a company and all the registered members in Kibus will get shares according to the points they hold. They will essentially swop their points for shares."
Nieuwoudt said kaolin could be used for a whole range of ceramic products such as tiles, cups, saucers, plates and other goods.
"At the moment we import most of these products. I am planning to establish small kibbutzes in poor communities for our members and I will help them build ceramic ovens and teach them the skills to use the kaolin to make ceramic products.
"Unlike the Kubus milk project, I do have a valuable asset. Years ago Sappi mined 65 000 tons of kaolin on my farm and used it to bleach paper. The cost of transporting the kaolin and the availability of other chemicals convinced them to pull out."
Nieuwoudt expressed concern about Sunday Argus reporting on Kibus, saying it was "very sensitive" and he was worried press coverage would derail a project that could uplift and create jobs for thousands.
"After all, when I ran the Kubus project, people ultimately did not lose money. People got back their money except for the GST (general sales tax). I didn't buy islands or other expensive stuff." He said he had the support of the Department of Labour for the training part of the project.
- Since the collapse of the Kubus scheme, Nieuwoudt has been involved in several controversial money-making schemes.
Now he has a new scheme and he reckons it will make millions.