Heather Hogan
The South African Police Service’s fraud unit is investigating an empowerment company that promised entrepreneurs their own bread distribution businesses, accepted their investments and then went into liquidation.
Despite assurances from police that the investigation will commence this week, disgruntled investors, believing police are taking too long, staged a demonstration outside the Germiston police station this week.
The Family Empowerment Trust, which started its bread delivery business in November 1998, claims it intended to help investors run their businesses. It arranged finance for them and approached various shop owners around Gauteng to secure commitments to purchase the bread. The aim of the project was to help the previously disadvantaged make a liveable monthly profit. The trust joined the newly founded Family Empowerment Company only two months later. They merged completely in June 1999.
For a minimum investment of R48E000 – though some people signed over as much as R100E000 – entrepreneurs were promised a viable bread delivery route, a set number of loaves to deliver daily and a truck which would be theirs after four years. They were also allegedly promised a minimum R6E500 monthly income after deductions for truck repayments and other expenses had been made.
In addition to the numerous delays in obtaining services and assets many investors experienced, some who tried to get refunds suspect their payments were delayed long enough for the successful overnight closure of the company in January 2000. One man arrived to pick up his cheque as prearranged, only to find company doors closed, while frustrated investor Beryl Frazer had been promised a refund of her money since last September. “I have definitely been scammed,” says Frazer.
Original Family Empowerment Trust investors’ current problems are far worse than those of entrepreneurs who joined the Family Empowerment Company after the merger. Several people who joined the Family Empowerment Company claim they never saw their bread, their trucks or their routes and have since lost their money. Trust investors claim, however, that although they did receive their trucks and routes, they only made a measly income, every cent of which went towards paying off the trucks -or so they thought. Jobless truck owners apparently owe more on their trucks now than when they bought them. According to investor attorney Ivan Zartz, banks say they never received any payment for trucks. Crestfallen entrepreneurs claim they now have debt collectors breathing down their necks to repossess the trucks.
“If Lyall Bester – the managing director of the Family Empowerment Company – were a rapist, he would have been arrested already,” says Zartz, who claims investments lost are worth well over R2- million.
Many investors, some unemployed or retired, are still trying to educate children and feed families and were counting on their lost money to do so. Sadly, a knowledgeable source surmises it is unlikely that much of the money will be recovered.