The South African watchdog Financial Sector Conduct Authority (FSCA) has warned investors against doing any financial services with two firms.
Destinata 104 (Pty) and Wealth Solutions Investments & Development Partners are allegedly entities “soliciting funds from members of the public by offering investments opportunities in the student accommodation sector”.
They are neither authorised financial services providers (FSP) nor representatives of an authorised FSP and there are no records of application to become authorised FSP with the FSCA.
Therefore, they are not authorised to render financial services as it states in the Financial Advisory and Intermediary Services Act.
Big return
Both firms “promise a total net return of 230% on the investment”.
The FSCA said the firms said their high returns are due to the following:
- Old Mutual guarantee in place against a portion of the project (R1bn) financial guarantee to Goldman Sachs;
- Old Mutual further provides collateral in the form of government bonds against the project (R1bn) over and above the financial guarantee;
- Goldman Sachs in London will provide R1bn financing for the project; and
- A section 12J venture capital structure in place which has been partially subscribed, meaning that a proprietor already has subscription, which will come to fruition during January and February 2020.
Goldman Sachs and Old Mutual have both confirmed to the FSCA that no connection exists between them and the said entities.
The financial authority said that investors should contact someone at the watchdog to check if they are regulated.
