South Africans may have lost millions to a Canadian-American ‘world top leading financial company’ that never existed
- South Africans have invested millions with "international financial company" Reannex Investments, which claims to offer huge returns for money transferred to it in bitcoin.
- But an investigation by the Canadian Broadcasting Corporation shows it doesn't exist, and that people such as its "chef executive officer" Sharlok Homes probably never existed either.
- Reannex appears to be a reincarnation of a Nadex Investments, against which regulators warned the public in late January – but by that point it already had a new name.
- For more stories go to the Business Insider South Africa homepage.
South African investors appear to have lost millions of rands to a "international financial company" that never existed but for a poorly constructed website made up of stock images, fake names, and unlikely claims.
Based on the promises of returns of 65% a month, South Africans handed over money to people such as a "chef executive officer" named Sharlok Homes, and initially thought they were on to a good thing.
But in November 2019 withdrawals suddenly became hard, some of those investors told the Canadian Broadcast Corporation (CBC) – which on thorough investigation could find no trace of the company at its supposed Canadian offices, or at its supposed American offices.
Many of the photos of executives and supposedly happy investors on the Reannex website were stock images, CBC reporter Sarah Rieger found, while biographies for the company's officers fell apart quickly under scrutiny.
With no way to reach the company or its officers, there is no apparent recourse for investors, including a single group that told Rieger it had invested $400,000, the equivalent of more than R6 million, with the company.
Reannex appears to have transacted mostly in bitcoin, further decreasing the odds of successful recovery.
Reannex appeared in February 2019 as the new guise of a company known as Nadex Investments, according to a video posted by one of its promoters. Almost a year later, in late January 2020, the Financial Sector Conduct Authority (FSCA) in South Africa issued a warning on "Mr Martin Sethole and Nadex Investments"
"The FSCA received information that Mr Sethole is encouraging members of the public to invest in a binary options strategy with Nadex Investments and promises high returns within 48 hours," the regulator said in its notice. "He alleges that Nadex Investments is a subsidiary of AIP Capital Management... AIP Capital Management have confirmed that it does not own any subsidiaries and has no relationship with Nadex Investments or Mr Sethole.
"It is the FSCA’s view that Mr Sethole and Nadex Investments (Pty) Ltd are conducting unregistered business and providing financial services without the necessary authorisation."
By the time of that warning, several million rand had already been invested with Reannex.
A local Reannex partner ran at least one investment seminar, in Durban in August 2019, to punt the company's products, complete with branded shirts and a slide deck.
A person who appears to be that same partner, identified as Nomcebo Dlamini, told the CBC she had no ties to Reannex, but sought to promote it based on promises of bonuses such as cars and houses for those who brought in new investors.
Reannex claimed to trade in high-profile shares such as Apple, as well is on the release of data such as US non-farm payroll data, through instruments it never specified.
There is no evidence that it ever made any investments on behalf of its clients, or conducted the trades it claimed.
(Compiled by Phillip de Wet)
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