SA investors burnt?
Feb 03 2009 09:09
Marc Ashton
Johannesburg - South African investors who have invested money in offshore-listed companies through an entity called Brentwood Group are struggling to retrieve their funds.
Nigel Clamp, a South African investor who spent $17 560 on shares in Nasdaq-listed Qwest Communications through Brentwood in April 2007, was informed that he would have to wait up to a year to get his investment back.
Clamp said: "Following their instructions, funds were transferred to an account in Cyprus. I became suspicious and asked for the shares to be sold as I needed to liquidate assets, only to be told that it may take a year for the funds to be paid because my payment made to them for the stocks was three days late."
Clamp opened an account with Brentwood after a phone call from a company representative, who asked if he was interested in opening an offshore account.
After he received and completed all the required documentation to comply with the Financial Intelligence Centre Act (Fica), the account was opened, he said.
Johan Vorster, another South African investor who estimates he should have about US$81 000 with the Brentwood Group, said he had a similar experience after receiving a call from a call centre agent.
When Vorster attempted to withdraw the funds, he was told by a representative of the Brentwood Group that he would need to pay a 30% "withholding tax" on the transaction. Vorster queried this with the SA Reserve Bank and SA Revenue Services. Both confirmed that no such tax existed.
'Victims'
Rob Roy, an Eastern Cape-based South African investor, also told Fin24.com that he had been trying for three months to extract funds from the group. He said that since last week, he had been unable to reach the company or any of the contact numbers he had previously used.
Clamp is organising SA resources and contacting investors who may have been burnt by the group to try and recover lost funds. He estimates "as much as $40m may have been taken from SA investors".
Clamp said he had been in touch with "at least eight other international and two local investors", who he termed "victims".
Clamp said: "Due to the past and present economic climate of South Africa and general interest of many investors in having offshore accounts, I believe these crooks have been targeting our country.
"To date I have been in touch with at least eight other international and two local victims."
Brentwood is registered in the British Virgin Islands.
Fin24.com's calls to the firm went unanswered.
Fin24.com has alerted the Financial Services Board.
- Fin24.com
