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Beware unregistered investments offering huge returns

Oct 7, 2019

Having an advert in a national newspaper does not necessarily make an investment opportunity legit.

Beware unregistered investments offering huge returnsThere are many investments being touted now on Facebook and even through adverts in mainstream media – including adverts placed with major Sunday papers – that should be treated with caution.

In most of these cases people are asked to invest a lump sum in an asset such as a truck, or even to purchase minerals such as coal. They are then told that either there is a contract that is guaranteed to hire out that truck, offering huge returns, or an opportunity to sell a mineral at a large profit.

Listen to Maya and Mapalo Makhu discussing this and other topics in the My Money, My Lifestyle podcast.

These are all unregistered businesses and do not have authorisation to take money from the public. The Financial Sector Conduct Authority (FSCA) has issued a warning that it is investigating unregistered investments that offer unrealistic returns.

Trucking scams are quite common in South Africa and tend to reappear every few years. In 2016 a 33- year-old man was arrested and charged with 67 counts of fraud after he allegedly baited investors to give him R80 000 with promises of huge returns from what he described as  “excellent, well serviced and maintained trucks with transport hire agreements.”. In 2006 a similar syndicate was bust by the authorities.

A few months ago, the FSCA issued a warning against a company called Chenge Logistics. They were offering investors a 116% return in a year. Upon raiding the premises in Pietermaritzburg the FSCA said that their investigation found that they were not investing the money as they had told their clients. In this case the owners of the company were promising over 100% return in a year for investing in their logistics empowerment business. The case is still to be heard in court.

We have received many queries about a company called Coin-It which offers a high monthly income for investments into logistical equipment. Their Facebook page show that they are starting to miss payments to investors with various excuses such as bank account issues.

The FSCA issued a statement warning against both Coin-It and Commex Minerals stating “these entities are suspected to be operating fraudulent schemes, with a high likelihood that clients’ investment may be misappropriated.”

Remember: when returns appear to be too good to be true, they usually are, and the fact that they have paid for an advert doesn’t make them legit.

Related:

This article first appeared in City Press.

14 Comments

  1. Is Globexplore world and Ethonex.com registered with Facsa

    Reply
  2. Is true wealth.co.za a legal company

    Reply
  3. Hi is afrimlogistics legal or scam

    Reply
    • haven’t heard of them but if they sound like any of the warnings in the article – avoid them

      Reply
  4. Good morning

    I am one of the investors at Coinit and based in Johannesburg. I also want to open a case against them but do not know if i should go to Johannesburg or Pietermaritzburg. Please advise.

    Reply
  5. Hi, is this ad a scam? Thanks, much appreciated.
    Gumtree Ad

    Description
    We are a trucking company based in Sandton, Johannesburg.

    We are seeking investors to help expand and get more trucks.

    Invest with R500,000, we will purchase one truck and pay you a fixed R150,000 monthly starting from the following month you invest.

    We are offering R150,000 of what the truck makes monthly for the next 5 years.

    Trucks make over R400,000 monthly. We will pay you a fixed R150,000 from profits monthly for the next 5 years and give you 10% shares in the company.

    Call: 0631435723 for more information or..

    Email: info@mgold.co.za

    Reply
    • That definitely sounds like a scam. Ask yourself this question – why would someone pay R150k a month to rent a truck that only costs R500k? We have seen so many of these trucking scams – all make similar promises.

      Reply
  6. Good day,is there a way that clients of coinit can retrieve their money back, or the law will make them pay back all money owed to its clients? and also how do as clients find out if coinit is lawfully registered with FSCA or not? thank you for taking my questions.

    Reply
    • This is the latest update I have. I think it will end up in a court case..unfortunately that means it will take a long time to resolve.

      “The Financial Sector Conduct Authority (FSCA) has become aware that Coinit Trading (Pty) Ltd management has sent a letter to investors, advising that investors’ contracts would be transferred to other associated companies. The FSCA would like to warn the public not to enter into any agreements or financial services business with unauthorised entities associated with Coinit
      In August 20019, the FSCA launched an investigation into Coinit and Commex Minerals (Pty) Ltd for suspected breaches of financial sector laws. This included a search and seizure operation by FSCA investigators at their shared premises in Dundee, KZN. On 24 September 2019, the Authority opened a case with the Directorate for Priority Crime Investigations (the Hawks) for further investigation. This investigation is still underway.
      Neither Coinit or Commex, nor its directors Mr. Michael Andrew Anthony de Beer (Coinit) and Mrs. Patricia Ursula de Beer (Commex) are licensed to conduct any financial services or receive deposits from the public. The recent correspondence by Coinit management to transfer investors to alternate, unnamed companies would once again be in breach of financial sector law, should these companies also not be licensed financial service providers (FSP).
      Members of the public are warned to always take professional advice before investing in an investment or business opportunity. They should also remember that the higher the potential return offered, the more risk is involved and the greater the chances of the operation being unlawful and criminal in nature”

      Reply

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Maya Fisher-French author of Money Questions Answered

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