Another Ponzi scheme? ‘Metals firm’ fleeces millions from South ...

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Another Ponzi scheme? ‘Metals firm’ fleeces millions from South Africans

A pensioner left distraught after losing burial society savings and his daughter’s nest egg for varsity fees

Journalist


Pensioner Jerry Sithole is still recovering financially after his run-in with Global Electio Investments.
In 2017, he invested his daughter’s university nest egg into the metals investment company after his son saw the company’s spectacular investment rates online.
The company offered interest rate growth of up to 23%, and Sithole eventually told a group of friends about the deal.
The group of about 30 members had a “burial society”, according to Sithole, a stokvel that would pay out if any of them died.
The group also invested tens of thousands of rands into Electio and awaited their eventual payout.
A year later, Sithole was told his initial investment of R43,000 had more than doubled.
Immediately suspicious because of the massive growth, he asked to withdraw his funds, and the woman who had assisted him began dodging his phone calls.
When he visited the Sandton offices, he learned the company had shut down and moved out of the building a few days before.
Sithole’s story is one shared by dozens – and possibly hundreds – of others countrywide who invested tens of millions into the company, whose director and key managers have been arrested after dozens of cases of fraud were opened with the Hawks.
Iranian director Jalil Motazedi, former director Ian McGregor and managers Shaunita Singh and Kyle Pillay appeared this week at the Specialised Commercial Crimes Court in Johannesburg.
The state is still finalising the number of charges while it awaits further victims’ statements.
Assisting the Hawks in the Electio probe was IRS Forensic Investigations, which gathered statements from 30 complainants last year.
IRS director Chad Thomas said Electio had used “boiler-room” style sales tactics, cold-calling potential investors and asking them to sign up their friends.
The company offered a series of “metal baskets”, ranging in costs from R43,000 to R500,000, with the metals supposedly appreciating in value while stored in Dubai.
This week, Piet du Plessis, the lawyer representing Motazedi, McGregor, Singh and Pillay, told the court he had already made representations to have the case withdrawn against McGregor.
He claimed McGregor had resigned after just a year with the company.
He then alleged Singh and Motazedi had both made statements to the police as whistleblowers before their arrests and that they were being punished despite having spoken out about the corrupt activities within the company.
Prosecutor Bongani Chauke argued there was no law saying whistleblowers could not be prosecuted.
Du Plessis also argued the case needed to be finalised quickly, as the Iranian embassy had also become involved, with two representatives monitoring the court proceedings.
Motazedi remains in custody after his bail was denied because he is seen as a potential flight risk.
It is unclear what level of support he is receiving from the embassy, as the representatives declined to speak to Times Select.
The matter was postponed to March for further investigation.
Sithole, who also attended the proceedings, said afterwards he was worried he would never see his investment returned. “I’m very frustrated.”
“My daughter has to rely on bursaries for university. That money was meant to support her,” he said.
“They told us to trust them, and I even brought in the burial society. Now we don’t know what to do.”
However, it seems more arrests may be on the cards.
“We are far from done in terms of arrests and extraditions,” Thomas said.
“The masterminds of the scheme have been identified both in SA and abroad, and we will be making representations to the NPA for further arrest warrants to be issued and for Interpol to issue red notices for the suspects abroad.”

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