Monday, July 4, 2022

Seretse warns Batswana over Ponzi Schemes

The Assistant Minister of Finance and Development Planning, Vincent Seretse, has cautioned Batswana against investing in dubious investment operations, which often promise high rates of return with little risk to investors.

Responding to an urgent question tabled by Shoshong MP Philip Makgalemela, Seretse said that recently the Non-Banking Financial Institutions Regulatory Authority (NBFIRA) had alerted members of the public about an overseas company known as EurEx Trade.

He said that the company’s investment terms and conditions were similar to a ponzi or pyramid scheme.

Seretse said EurEX is not registered in Botswana but in Panama.

“NBFIRA investigations reveal that the company is not regulated by Panama Regulatory Authorities or any of the major regulators. NBFIRA warned the public that NBFIRA does not have jurisdiction over such schemes as EurEx and therefore, should members of the public choose to participate in such investments, they do so at their own risk,” said Seretse.

With reports that many Batswana have been swindled by EurEx through its investment scheme, Makgalemela sought to know the concerns raised by NBFIRA on EurEx trade in Botswana.

“The government aligns itself with the position taken by NBFIRA, in warning the public to be aware of any investments that offer abnormally high returns, as such investments also carry a high level of risk. Investors are encouraged to do business only with recognized entities,” he added
This follows reports that the company’s website had vanished.

Seretse said that the scheme normally generates returns for investors by acquiring new inmvestors,whose funds are used to pay the older investor, adding that when new investment stop, the scheme collapses because there is no inflow of funds to pay out.

“This reason is why the commission is paid to people who recruit others into the scheme.

Further to that, withdrawals are discouraged and an investor is not allowed to transfer money from the first plan, to a second one. This is a means by which new cash flows are secured. When new cash flows cease, the scheme collapses leaving the new investors with nothing,” he stated.

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