Durban venture company Tyraz Investments, which promised unrealistic returns on capital outlay, has been ordered by Fais Ombud Charles Pillai to repay a client the full amount that had been invested.
Pillai, pictured, the Ombud for Financial Services Providers, has ordered the company, that paraded fake proof of application for an FSP licence, to compensate the full amount invested in 2004 by Cornelius Johannes Ferreira, of Durban.
Ferreira responded to a newspaper advertisement in which Tyraz Investments promised 70 percent capital guarantees under normal trading conditions and "a monthly income of three percent or compound your profits to 42 percent per annum".
Ferreira placed R50000 from his retrenchment package with Tyraz Investments for dealing or trade to take place in a managed trading account with trading platform FX Active Ltd.
However, upon review of his managed account via the Internet, Ferreira discovered that his capital amount had been reduced to R6033.
Following numerous visits and a letter of demand to the respondent, represented by Jan Hendrik van Zyl, the complainant was unsuccessful in obtaining payment.
Ferreira then lodged a complaint with the Office of the FAIS Ombud.
"There can be no doubt that not only was the complainant not advised but, even more alarmingly, fraudulently led to believe that he was dealing with a duly licensed FSP in order to convince the complainant to part with his money," the Ombud ruled.
"Had the respondent been registered and followed the requirements of the Code, the complainant's money would not have been invested in this manner."
The Ombud ordered the respondent to compensate the complainant an amount of R43967, plus interest.