'People are not investing as they used to'
"I filled in an application form for the refund - for which I am still waiting for"
ON JUNE 8 I returned to Mova Street in Katlehong, East Rand, to the offices of Hlala Ethembeni Finances to claim the returns on my March investment.
This was after I was advised that I could not get my returns in April as promised.
When I arrived at their offices I was speechless. No queues, no cars parked outside, no life.
As I stood in dismay, I realised that the offices were in fact open. A group of local youngsters sat outside chatting. The buzz and excitement, police vans and hawkers were nowhere to be seen.
Investment stakes had also changed. The minimum investment had dropped to R500, with an administration fee of 30% and the interest rate had shot up to 200% in just a month.
There were only six employees and not a single investor in the building.
I asked why the place was empty and the only response I got was: "People are not investing as they used to".
When I enquired about my returns one of the staff members said: "It is either you apply for a refund, which you will get in July, or you wait to get your return on investment in August."
I opted for a refund.
I was ushered to the cashier's office where I filled in an application form for the refund - for which I am still waiting for.
Last week the deputy registrar of the financial services provider at the Financial Services Board, German Anderson, said the interest rate promised was "ridiculous".
Hlengani Mathebula, head of strategy and communications at the South African Reserve Bank, warned that it is illegal for someone to take deposits from the public under the pretext of running an investment scheme.
Mathebula said in terms of the provisions of the Banks Act any person taking deposits from the general public in contravention of the Banks Act is guilty of an offence and might be prosecuted. Criminal offences are reported to and investigated by the South African Police Service and perpetrators are prosecuted by the National Prosecuting Authority in a court of law.
Hlala Ethembeni was only registered on February 17 2012 as a private company. It is not registered with the FSB nor the SARB.
This article was first published in the Sowetan newspaper on Monday 2 July 2012