Investment scam to return R1.5m
GDSMI is alleged in court papers to have fleeced dozens of pensioners and professionals in the Eastern Cape of hundreds of thousands of rands through the scheme.
Grahamstown High Court acting Judge Richard Brooks ordered the company to pay back more than R1.5-million to 17 Eastern Cape pensioners and professionals.
One of the investors, retired Queenstown teacher Cecilia Nonkosi Stokwe, 53, said in court papers she invested R250000, a significant portion of her retirement package, in the scheme after being told that she would receive at least 35% a month back on any investment she made.
If she invested more than R100000 this would double to 70%. She was told she could withdraw the interest on the amounts immediately and that if she wanted to cancel the investment and recoup her funds she could do so with just 24 hours notice.
She was also told she would get R650 for each person she referred to Go Direct. She referred some 10 people to them. She received no money for these referrals.
When she sought to withdraw her first lot of interest of R35000, she was informed she could have only R4000. On inquiry she was informed that the amount was never certain and that only the “brokers” could tell her why.
She decided to cancel her entire investment and recoup her money.
Despite doing so in December 2013, by the end of January this year she had received nothing.
Her attorneys wrote to Go Direct and she received a letter saying she would get R10000, then R100000 in February and the remaining money in June.
She received R10000 as promised in February but only R60000 in three equal payments of R20000 in the months that followed.
She was advised by one of its directors, Mzoxolo Bezu, that she would receive no more money until she stopped dealing with Go Direct through her lawyers. She received no further funds after that.
She subsequently discovered that the regulatory authority Consumer Watchdog had warned the public that Go Direct was not licensed by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) to take funds on behalf of clients.
In April, Go Direct closed its Queenstown offices.
“The business activities of Go Direct amount to an unlawful scheme. It is apparent that the scheme operated by Go Direct was in fact unlawful,” she said in her affidavit.
She said extravagant returns were promised to investors and it was clear the company had operated wrongfully, illegally and unlawfully and had committed a fraud on its investors.
She said it was clear the scheme’s liabilities exceeded its assets and it could not honour its contracts with investors with repayments.
All agreements with it were illegal and void and all investors were entitled to repayment of the full proceeds of the money they had paid in, with interest.
Brooks ordered GDSMI to pay back all of Stokwe’s money as well as those of the other 16 investors.
He also awarded legal costs against Go Direct on a punitive scale.
The investors were represented by De Wet, Shaw and Baxter attorneys in Queenstown and Wheeldon, Rushmere & Cole attorneys in Grahamstown.