Banxso victim launches liquidation application

A Banxso victim has filed an urgent liquidation application against the company, alleging it is a “criminal enterprise” that cost her R500 000 in savings.

This move comes after three banks froze Banxso’s accounts, the Asset Forfeiture Unit seized its remaining funds, and the Financial Sector Conduct Authority (FSCA) provisionally revoked its financial licence earlier this month.

The applicant, Carol Margaret Wentzel, a 60-year-old retiree from the Western Cape, details her experience with Banxso in a lengthy affidavit that echoes the accounts of many other victims who have contacted Moneyweb.

ALSO READ: WATCH: Banxso defies licence suspension

Deepfake Elon Musk ad

In her affidavit, Wentzel states her experience with Banxso began in July 2024 when she encountered an online advertisement featuring a deepfake interview with Elon Musk. In the ad, Musk promoted the Immediate Matrix investment opportunity, which promised a weekly return of R34 300 for a R4 700 investment.

The FSCA warned the public in December last year against doing business with Immediate Matrix. Banxso has denied any links and states it received referrals from Immediate Matrix after being the victim of hackers who wanted to harm Banxso’s reputation.

ALSO READ: The FIC busts Banxso

Banxso was quick to call

Wentzel states she registered on the platform and instantly received a call from a Banxso representative, Akona. She made an initial deposit of R1 800, and David Hoffman was assigned as her success manager.

Hoffman assisted her in opening a Banxso account. “He directed me to click on certain ‘buy’ and ‘sell’ options, which resulted in an instant profit of R900. I had no idea how to execute a transaction and was completely reliant on David’s advice,” Wentzel states in her affidavit.

Based on the success of this “investment”, Wentzel told Hoffman that she wished to make an additional deposit of R30 000.

“David and I had numerous telephone and WhatsApp conversations after this call, in which he applied increasing pressure on me to urgently make the deposit of R30 000.”

She then made two deposits totalling R30 000.

Wentzel states that Hoffman then became increasingly insistent on making additional deposits.

“As David became increasingly insistent and under the promise of enormous returns on my investment, I made a further deposit in the amount of R470 000.”

“I clearly communicated to David that this formed part of my retirement savings. He assured me that should any losses be incurred, it will not exceed R1 000.”

Wentzel accounts that the trades performed well at first but then started to suffer losses, leading to her capital being “wiped out”.

ALSO READ: AfriMarkets: Banxso’s emerging twin?

Additional deposits

“On 26 September 2024, I received a call from David, who informed me that he had spoken with his manager and that they would be able to make up for my losses with further trading, should I deposit a further R500 000,” the affidavit reads.

Wentzel complained to Banxso’s complaints department, after which she received another call from Hoffman. “He said that if I invest a further R500 000, Banxso would also put in a further R450 000. I realised something sinister was going on, and I told David that I was going to see an attorney. To date, I have not received any further advice from Banxso.

“Based on my experience as explained above and the overwhelming evidence unearthed by the FSCA, I respectfully submit that Banxso is clearly a criminal enterprise with an unlawful and illegal business model,” Wentzel states.

Immediate Matrix victims refunded

Wentzel also refers to claims Manuel De Andrade, Banxso’s chief operating officer, made in an affidavit in Banxso’s unsuccessful application to unfreeze its bank accounts. He stated that Banxso identified clients onboarded by Banxso through Immediate Matrix and refunded them. He noted that R14.1 million was repaid in total and, according to Banxso, was “the totality of the impact of the Immediate Matrix scheme”.

This amount seems low, considering around 220 victims contacted Moneyweb and claimed they had lost more than R115 million. Virtually all these individuals claimed they were onboarded as Banxso clients after registering on fake ads.

Only 16 acknowledged receiving refunds, although it was mostly a fraction of their total deposits.

The case will be heard on 7 November in the Cape Town High Court.

Banxso response

Hendrik Theron of Hanekom Attorneys, representing Banxso, stated in a response to questions:  “The liquidation application was received after hours on Friday afternoon, 25 October 2024. Our team is currently traversing the content of the voluminous application and will, in due course, file answering papers. As such, we are otherwise occupied, and trust that you are able to obtain these papers from the sources who have kept you abreast of it having been launched in the first place.”

Liquidation application website

Digital forensic experts TCG Forensics launched a website explaining the liquidation proceedings and offering victims the opportunity to register as creditors or affected parties. The website can be accessed here.

In response to questions, Pierre du Toit of Mostert & Bosman Attorneys, representing Wentzel, said creditors are considered to be parties with an interest in a liquidation application. “As such, they have the right to intervene in the liquidation application to either support or oppose the liquidation of Banxso.”

He added that creditors also have the right to nominate an insolvency practitioner should the company be placed in provisional liquidation.

Du Toit also said that if the court grants a provisional liquidation order, provisional liquidators will be appointed and “take control of Banxso’s assets and business and start investigating what exactly their business model entailed and what happened to clients’ funds.”

Regarding the possibility of Banxso clients being refunded, Du Toit said it will depend on Banxso’s assets. “Fortunately, the FIC and NDPP managed to freeze more than R70 million. The rest will have to be traced and recovered, if possible, by the liquidators,” he said.

This article was republished from Moneyweb. Read the original here.