GARDEN ROUTE BUSINESS NEWS - While hundreds of former Niflas clients who lost in excess of R150-million are struggling to make ends meet, a 'Niflas company' is conducting business as usual in the very heart of George - merely under a new name.
Roadmap Financial Services in York Street operates under the Financial Services Provider (FSP) number of Niflas Risk 800 Holdings, and one of the key players at the company is Carina Strydom, a former director of the ill-fated Niflas Silhouette Platform (NSP). She is also the spouse of Niflas founder and CEO, Pieter Strydom.
The company was placed in liquidation in 2015. Hundreds of mostly elderly residents of the Southern Cape lost their savings when Niflas ran into financial problems following reckless investments by the Strydoms and their CFO Jan Mostert. Both Pieter Strydom and Jan Mostert have been debarred.
Mapping the road
Earlier this year Roadmap added insult to injury by approaching the very same clients whose money Niflas had lost, with various financial offerings.
Roadmap, a former Niflas entity, was sold by the liquidators to a former Niflas employee, Chrismare Botha, after Pieter Strydom approached them in 2016. Strydom wished to buy one of the Niflas entities that escaped liquidation in order to continue doing business in the financial field with his wife. The liquidators were not aware that Risk 800 still had an FSP licence and at the time joint liquidator Danie Acker warned Strydom that should he later find that Risk 800 had also been involved in any impropriety, he would not hesitate to apply for Risk 800's liquidation.
A forensic investigation later commissioned by Acker uncovered that Niflas Risk 800 still had an FSP licence. Until the beginning of last year the Financial Sector Conduct Authority (FSCA) - formerly known as the Financial Services Board (FSB) - was unaware that one of the entities was still operating. The FSCA has confirmed to George Herald that regulatory action cases are ongoing and that a decision will be made public when finalised.
Insurance claims
Meanwhile, as Roadmap Financial Services is using the Niflas FSP number to conduct business, the Niflas investors have been submitting individual claims to Roadmap's insurers for the millions owed to them after the liquidators advised them to do so. The claims total R116-million and a class action may soon follow.
Roadmap's personal indemnity insurance (PI) is still registered under Niflas Risk 800 - leaving the door open for claims. Even if Roadmap's licence is revoked, the claims will go ahead as they have already been logged.
And as if the world is not already hot enough for the Strydom couple and Mostert, Acker has brought a Section 424 application against them in the High Court, asking that they personally be held liable for their clients' losses. The former Niflas directors are opposing the application.
Hawks investigating
Acker has also reported the case to the Directorate for Priority Crime Investigation (Hawks) and has filed a forensic report with the Hawks compiled by ENS Forensics. An investigator of the Hawks attended the inquest at the George Magistrate's Court last year and pending the outcome of the investigation, criminal charges against the Strydom couple and Mostert could follow.
One of the reasons Niflas ran into trouble was that it invested R62-million of clients' money with micro lender, Bridge, and when Bridge went into business rescue, the incredibly high monthly interest payments of 19% to Niflas fell to 6% before completely drying up. The Niflas Silhouette Platform then received Bridge shares in lieu of their investment after cutting a deal to avoid Bridge going into liquidation - all in vain.
Bridge offered to buy back the near worthless shares from Niflas for the paltry sum of R600 000. Acker declined the Bridge offer - an amount which is less than 1% of the Bridge investment due to the creditors. But, it doesn't seem as if the Bridge shares will soon be worth much more and no dividends have been declared.
To date Acker has managed to retrieve R30-million from debtors and through the sale of assets – the nett proceeds of which were paid to investors as dividends and accounted for in four liquidation and distribution accounts. A fifth payment is expected to be made to the creditors at the end of the year and more will follow as and when the liquidators succeed with further recoveries.
Bad investments
Among the unorthodox "investments" made by Niflas with their clients' money was a loan of which R8-million was written off, due to flawed gold bars confiscated by the government. An amount of R27-million was used for the benefit of Niflas "infrastructure" and other expenses. This was completely illegal as clients' money was to be invested and not used for the day-to-day running of the business, or, as was the case, new window frames and expensive appliances for their farmhouse as well as a Unimog vehicle.
Requests for comment was sent to the insurers, the Strydoms, Mostert and Chrismare Botha, but at the time of going to press on Wednesday afternoon, no response was received. The FSCA sent a short response just before going to press. Read the Q&A online.
Read previous articles:
- Unstable bridge to Niflas millions
- Niflas se finansiële rolspelers koes vrae
- Auctions secure over R17 million for Niflas creditors
- Niflas liquidation going ahead
- Niflas Silhoutte denied leave to appeal
- Niflas Silhouette in liquidation
- Niflas likwidasie-aansoek uitgestel
- Niflas liquidation battle heats up
- Liquidation application in court next week
- Niflas Silhouette to fight liquidation
- Niflas Silhouette to be liquidated
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