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Author: Julius Cobbett|

28 February 2013 15:54

Court freezes ‘2%-a-day’ Defencex scheme

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Registrar of Banks takes action after receiving complaints and enquiries from the public.

JOHANNESBURG – The Western Cape High Court has frozen the bank accounts connected to a scheme called Defencex. The money-scheme has lured thousands of clients from all over the country with its promises of high returns. Defencex sells “points” for R100 apiece. These points “earn” 2%, or R2, a day for 75 days, at which point they can be withdrawn.

Defencex is a trading name for Net Income Solutions, a close corporation with one member, Chris Walker (pictured below). Walker, 46, is no stranger to controversy. His previous scheme, Gold Charity Fund Investments, was reportedly declared an unfair business practice back in 2002. Walker was accused of operating a pyramid scheme which abused the name and image of former president Nelson Mandela.

This week some Defencex clients were complaining on Facebook that banks would no longer accept their deposits. Moneyweb asked Deputy Registrar of Banks Michael Blackbeard whether any action had been taken against the scheme.

Blackbeard responded that auditors PWC had recently been appointed to investigate Net Income Solutions/Defencex following complaints and enquiries received from members of the public.

On Thursday morning the Registrar of Banks applied to the Western Cape High Court for an interim order interdicting Net Income Solutions/Defencex from continuing its deposit-taking activities. The order was granted, and has effectively frozen Defencex’s bank accounts. A copy of the order can be downloaded here.

Says Blackbeard: “The court granted a return date of 25 March 2013 for Mr Walker etc. to show good cause why the orders should not be made final.”

Blackbeard says he is unable to divulge further information as he is awaiting the final report from PWC.

At the time of writing, neither Chris Walker nor Defencex had responded to requests for comment. A request was made on Wednesday via Defencex’s Facebook page, and on Thursday via e-mail.

The scheme supposedly revolves around the sale of “emotional freedom” products and services. The Defencex website warns: “Any reference to specific levels of earning on this website are for the purpose of explaining the compensation plan only and are not projections. Your actual income will depend upon the success of your marketing efforts and of those you introduce to the program and on the overall profitability of the company.”

But few of the members appear to care about the products on offer. It is the income opportunity that is the primary attraction.

Comments (unedited) on the Defencex Facebook page indicate the hope the scheme has created for its members. For example, Nomsa Mahlangu wrote:

“Thanx to Thembi Mathebula for telling about defencex now i can make my dreams come true and studying at the same time. u the star babs.”

Some members refused to heed the warnings of the sceptics. Thabisile Magoboza wrote:

“Today @work our management inform us not to join, i just laugh alone willing to buy points while reading her email. Im so proud to b the part of this Defence. Dont u think theres sumthing worry about?”

And Eunice Valovi posted:

“This topic of Chris defrauding us is becoming boring. Enjoy your money people. they don't have money, they are jealous. today I woke up @6 and found that my profit was paid and I didn't even have 2 wotk 4 it while they go 2 work everyday and earn peanus that jealosy. if it makes u feel better don't buy point 4 75days and take u're money and profit and let us enjoy our money.”


              Chris Walker

Topics: Defencex, Christopher Walker, Defencex, pyramid scheme, Net Income Solutions, Michael Blackbeard, High Court, Registrar of Banks, Reserve Bank
Who's Who
JOURNO PROFILE

NAME:  Julius Cobbett
BIO: Moneyweb’s investigations journalist and cycling fanatic.
EMAIL:  julius@moneyweb.co.za

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