Mendes Prior: be wary of help offered
The Financial Services Board (FSB), advises those South African investors who lost millions of rands through the Mendes Prior investment scam, to be cautious when dealing with firms offering to recover the funds on their behalf.
This follows letters of solicitation to the victims by a Dutch group, Massena & Partners. FSB spokesperson Russel Michaels says several investors had enquired from the FSB whether Massena & partners were legitimate.
“A representative of Massena & Partners visited us recently to discuss Mendes Prior. However, the FSB is not in a position to endorse any forensic financial investigation bureau. We understand that the firm contacts the victims by telephone and letter, offering to help them ‘recover any funds sent fraudulently to Mendes Prior. Immediate and decisive action is required.’
“According to a letter Massena & Partners sent to the conned investors, ‘it is crucial you establish yourself as a victim prior to any guilty verdict, which will open the door for access to the funds.’
“Some investors told us according to Massena & Partners, for them to be legally recognised as victims, they must file criminal and civil charges. They must also retain Massena & Partners’services at a 10% upfront retaining fee and a further 10% of any funds recovered would also be payable.
“Several Mendes Prior victims have instructed a firm of attorneys to act on their behalf. My advice is that those 690 victims form an association and appoint an internationally-recognised forensic investigator. It is not always wise to throw “good” money after “bad” money.
“The FSB has submitted a dossier about Mendes Prior to the National Directorate of Public Prosecutors for investigation.
"According to our records, 690 South Africans had invested huge sums of money and about 100 have complained to the FSB. Some of the investors had invested between a few thousand rand and R2m . The total amount of money which South Africans entrusted to Mendes Prior is $27, 847, 657 or R232, 806m.”
Since November 1999, when the activities of Mendes Prior was first exposed by the FSB, the FSB had issued several warnings that Mendes Prior Europe, Mendes Prior Orient and Mendes Prior Offshore were not authorised to solicit business in SA.
Late in August this year the alleged brain behind Mendes Prior, Sheridan Leslie Cox, a British citizen was arrested in Taiwan for allegedly using false travel documents.
"Once again we appeal to investors to first check with the FSB whether so-called investment managers such as Mendes Prior are approved, before investing their money offshore,” Michaels said.
He added that when the FSB approve foreign investment managers, it ascertains who the regulator is, gets confirmation from the regulator that the entity is approved and may promote its business in another country.
“We only regulate the marketing activity of foreign investment managers. If a South African investor has a problem, we will ask the foreign regulator to deal with it.
“We expect the regulator to take appropriate action and inform us as we have signed several Memorandum Of Understanding with foreign regulators.”
“To check whether an investment manager is approved, log onto the FSB website:www.fsb.co.za <http://www.fsb.co.za> then go to departments, choose financial markets, then click on ‘list of foreign investment managers approved for marketing purposes’. If the entity’s name does not appear, stay clear.”
Potential investors may also contact the FSB directly at telephone number 012 428 8000, or use the toll-free number, 0800 110 443.