Monday, September 23, 2019

PONZI SCHEMES SCANDAL - HEARTLESS SUNDAY TIMES PROMOTES THEM AND GIVES THEM EDITORIAL IMMUNITY FOR ADVERTISING IN IT

Dear Readers,
Eben Gewers Head of
Advertising Sales at the
Sunday Times 
          Is it okay for South Africa’s biggest selling national paper the Sunday Times, renowned for its investigative exposé’s, to accept adverting inserts without question? Ones that cry out: ‘Ponzi scheme! This will surely devastate thousands of families.’
          Scams like this thrive in an economy in which people are struggling to make ends meet, because they offer a means of making a lot of money quickly.           
          In this case one ad was from the impressively named CommEX Global Corporation Limited Sheung Wan operating out of Dundee (population 40 000) in Kwazulu Natal.
          It offered readers the chance to become rich by investing in various minerals from coal to iron ore; manganese and dolomite. The promoters claimed that because of their “long term relationships” with mines around the world they could buy these minerals at below market price and then sell them “at a profit.”
          The big hearted philanthropists that they are however didn’t want to keep this profit for themselves. “Now for the first time ever, that profit can be yours,” they told readers.
          For an investment of R57 600 (minimum purchase amount) you could buy 72 tons of coal which they would then “assist you to sell at a profit” resulting in you being paid R5624 a month for 18 months. You would thus almost double your money with R101 232 in the bank at the end of the period.
          It would have been fun, if one had the money and didn’t mind losing it, to have invested the minimum in coal and told them not to sell it, but to rather deliver it to their Dundee premises so you could pick it up. My guess is they had no intention of buying any minerals at all.
          Similar hard to believe returns were given for the other three minerals.
          On 1 September 2019 the CommEx advertising insert appeared in this Tiso Blackstar owned paper just three days after BusinessLive, the online business website in the same group exposed CommEx as a Ponzi scheme.
          It revealed that the Financial Sector Conduct Authority (FSCA) was investigating both CommEx Minerals and Coin-It Trading that appeared to be an allied company, as they were suspected of operating fraudulent schemes with a high likelihood that investors would lose their money.
          FSCA was said to have named Michael Andre Anthony de Beer as the director of Coin-It and Patricia Ursula de Beer, who was believed to be his ex-wife, as a director of CommEx Minerals.
            Coin-It was promising returns of up to 200% in only three years by selling trucks to investors, which it would then use for all kinds of “logistic services relating to transportation and distribution” to earn the amounts promised.
            When FSCA got wind of it investigators raided the offices of CommEx Minerals as well as the private home of a former director of Coin-It. A notice outside Coin-It’s premises in the Avon Industrial Area of Dundee announced that FSCA had closed the business until further notice.
          According to this authority neither firm was licensed to provide financial services or to receive deposits from the public.
          Brandon Topham, a director of investigations and enforcements at FSCA described Coin-It as showing “hallmarks of a Ponzi scheme.”
          In the Sunday Times of 1 September there was another insert together with the CommEx one. It was clearly from the same people. Entitled My House it enticed the public to buy a R335 000 a timber framed, prefabricated house over any period they chose up to 25 years. Once the full price was paid the house would be built on their property. It involved: “No Banks, No Interest, Zero Deposits, No Delay!” they claimed.
On 9 September I sent Topham a copy of the My House advert that was in the Sunday Times and asked if they were also investigating this.
He replied: “No we were not, but we are now.”
A 51 year old divorcee who supports her son, his girlfriend and her 2 year old grandchild, was one of the many people who lost money after buying trucks through the Coin-It scheme. When investors started being given excuses as to why their payments were not being made several Facebook groups were established. They had various opinions about whether or not Coin-It was legitimate.
“A person, who wishes to remain anonymous, contacted me and told me to read these posts,” she told me. “He explained that I had been caught up in a Ponzi scheme. I didn’t want to believe him, but he had no reason to lie.
“I realised then that there were no trucks because if you add up all the membership numbers on the various social media groups there are in excess of 10 000 of them. Then there are those that don’t’ do social media.
“I am not sure that Dundee could accommodate that many trucks. The smallest investment was R130 000 and the largest R500 000.”
          All went well for her in beginning as she was getting her regular monthly payments. Then cracks began appearing in the scheme before her contract was over, and between this and another truck she bought on the same basis she lost money.
She was never given any conclusive evidence that the trucks she bought actually existed.
See: feisty rowena james 
By accepting advertisements for Ponzi schemes like this without taking even the most elementary precautions the Sunday Times was spreading misery just to make money. The paper raked in an estimated R500 000 for the two inserts and if they had gone in its 310 000 copies they would have been seen by and awful lot of people throughout the country.
This shocking behaviour was compounded by the editorial side of the paper that clearly does not bite the hand that feeds it.
After being told on the phone by Debbie Thompson that she was the advertising manager of the print side of the Sunday Times I sent her this email to be fair to her paper by getting it’s side of the story. In it I asked her the following:
1.    “Does the Sunday Times vet very out of the ordinary inserts like this, before it agrees to carry them, by looking up the advertisers on Google for instance?
2.    “Does the Sunday Times ever check with the authorities to see if firms making offers like this are licensed to conduct financial services or receive deposits from the public, before it accepts adverts of this kind?
3.    “The Business Section of the Sunday Times carries a warning (nowhere near any advertisements) telling readers to “carefully scrutinise advertisements offering investment opportunities.” So why does this warning not appear on the kind of advertising inserts I have mentioned?
4.    “And if the paper wants readers to scrutinise advertisements of this kind to avoid being had, why doesn’t the Sunday Times do the same thing, especially when the claims made in these two inserts were so unlikely to be fulfilled?”

Instead of getting a reply from Debbie Thompson I got one from the Head of Advertising Sales Eben Gewers.
He told me: “Inasmuch as we try very much to encourage ethical advertising, we however do not accept any liability nor offer warrantee to the content of paid ads. We warn readers in all our publications regarding their responsibility to scrutinise adverts.”
These warnings have got less conspicuous over the years. Top
          is 2010 with bottom the current one that is not even in the
        main paper, but tucked away in the one corner of Page 2 of
the Business section nowhere near any adverts.
         I replied: “From what you say you don’t take even the most elementary precautions to ensure that crooks don’t promote their Ponzi schemes in the Sunday Times, which effectively means this paper aids and abets crooks. I accept that you can’t be blamed for things that are not right in some advertising, but when you have inserts for the likes of CommEx and My House, people in an investigative publication like the Sunday Times should be able to recognise them as suspect.
The Sunday Times clearly doesn’t care if a Ponzi scheme it advertises destroys thousands of lives as long as it is making money.
“It’s significant too that even though the On-line business section of your group has exposed these people for what they are, and so have other publications, the Sunday Times has not mentioned a word of what has happened to these two Ponzi schemes.
“The moral to the story seems to be: If you don’t want your dirty deeds to be exposed in South Africa’s biggest selling Sunday paper, put an advert in it.”  
I also asked him to tell me what they did to ‘encourage ethical advertising.’
My email to him was dated 15 September. I have not had a reply so I think it is reasonable to conclude that he did not dispute anything in my email.
Regards,
Jon, a Consumer Watchdog and self appointed Poor Man’s Press Ombudsman, who fears that his old paper has really lost its moral compass now.
P.S. From 2010 onwards I campaigned on my blog to get the Sunday Times to stop carrying get-rich-quick ads. Eventually some years later it appeared to have stopped this, but not before a lot of lives had been ruined. Then it lapsed by carrying another one in January this year & I wrote this post. 
SUNDAY TIMES AT IT AGAIN WITH TOO GOOD TO BE TRUE ADS No more were featured until these two Ponzi scheme ad inserts appeared. It seems that thousands of people, many of whom were blacks, who could least afford it, were taken for a very expensive ride by the people who were behind these Ponzi schemes. Like so many big businesses all the Tiso Blackstar Group is interested in is making money with the Sunday Times regardless of the ethics of what it does to achieve this.

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