Strange silence on SuraPure Drinks matter

Six months on, little progress appears to have been made.

JOHANNESBURG – SuraPure Drinks – the fraudulent drinks retailer that owes 18 000 investors in the region of R87 million – has yet to repay any of those investors more than six months after it was instructed to do so.

And information from Reserve Bank-appointed repayment administrators, KPMG is not forthcoming, according to a person familiar with the matter.

“We handed over all our documents to KPMG, including bank records, accounting records, details from the SuraPure online platform, and we’ve not heard another peep. There have been no updates and no information from anyone,” Steven Ambrose, owner of Strategy Worx Consulting, tells Moneyweb.

Ambrose is a chartered accountant who undertook an extensive investigation into SuraPure’s business affairs on behalf of business rescue practitioners (BRPs), First City Administrators.

SuraPure was placed into business rescue in April 2014. Provided for in the Companies Act, business rescue entails a third party taking control of a financially distressed company with the hopes of rehabilitating it.

Based on their findings, Ambrose and the BRPs suggested in August that SuraPure be wound up in business rescue or liquidated after concluding that was no prospect of the business being rescued or restructured.

Critically, Ambrose found that SuraPure’s liabilities (money owed to investors) outweighed its assets by millions of rands and that it was far from matching online stock orders of R184 million with physical stock sales of at most R5.7 million.

Investors in SuraPure could either resell physical stock themselves, mostly bottled water and juices, or allow SuraPure to resell stock on their behalf, in which case they were promised a 120% return in 60 days. The vast majority of investors seem to have opted for the latter option and have since March last year (when SuraPure’s account was frozen by FNB) been on tenterhooks over their investment into what has since emerged to be a fraudulent scheme.

Although SuraPure remains under business rescue, and legally in the control of BRP Harry Kaplan, it is still being investigated by KPMG. “We’ve been asked by the Sarb not to liquidate the company pending the investigation by KPMG,” Ambrose adds.

SuraPure contravened the Banks Act

In October 2014, the Sarb announced that an EY investigation revealed that SuraPure Drinks, together with its director Cornelius van der Merwe and his related companies, NaxaInvest and NaxaPhase, as well as one Liesel Oosthuizen, had contravened the Banks Act.

The Registrar ordered these companies, under the collective banner SuraPure, to repay investors, appointing KPMG as the repayment administrators.

“KPMG is currently compiling a list of investors of SuraPure and has set-up a dedicated telephone line through which investors can submit their details,” a Sarb statement said at the time.

More than six months later, KPMG confirms that 1 362 investors have phoned the helpline with information, while fewer still have submitted documentation to support that information.

First City Administrators, meanwhile, has stored 10 000 claim forms, according to Ambrose.

Moneyweb called the KPMG hotline and was told by a call-centre agent, “We are still waiting for the Reserve Bank to tell us when to repay people. They will inform us when they are ready to repay… We are waiting for them [the Sarb] to tell us how much is going to be paid.”

When asked what the delay is and where the matter now stands, KPMG director, Déan Friedman comments, “The solution that may be pursued is currently under consideration. The time of any repayment administration process is determined by the complexity of the matter, the amount of work necessitated by the circumstances and events of the matter and various inter-dependencies that need to settle.”

Friedman says that KPMG has gathered “further and other information” on SuraPure – over and above the information submitted by the BRPs and EY. Between EY and us I think they [the Sarb] had an 80% view of everything. It just seems that it shouldn’t take them as long as it has. There’s just no urgency,” says Ambrose.

The repayment process for the Defencex ponzi kicked off in March this year, about 11 months after the Sarb appointed PwC as repayment administrators.

Attorneys acting for SuraPure’s Van der Merwe confirm that he is in contact with KPMG. The attorneys, who prefer to remain anonymous, have filed a leave to appeal the ruling that SuraPure contravened the Banks Act and wait for the application to be heard in the South Gauteng High Court.

The Sarb did not respond to an emailed request for comment or a voice message.

 

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Dear Journalist, I’m very disappointed! This whole article is full of your speculation! If it was a Fraudelant Company why they not been charge by the South Africa Police. I went out of my way today to check the history and I can see there is a court document on the 11th of November 2014 been issued for contravened the Banks Act.

As far the Business Rescue PR that is been unlawful been appointed they have now case. For someone that have no intention In this matter and with 2 hours work I’m very disappointed in your article! Furthermore for an Company that have turnover of R5.9 Million on selling water and juices, they did something right! I’m going to make it my business to find the management of this company!

Surely you don’t still believe in this scam? It’s a Ponzi scheme. Have a look at all the previous articles on the subject on Moneyweb over the last year or so.

Hi Cheeky, apologies for the delayed response to your comment, I’ve only come across it now. Unfortunately the SAPS are notoriously slow to charge any of these companies for fraudulent behaviour and many are never charged. While SuraPure may have sold R5.7m worth of stock, it collected orders of some R184m, which means it was using money from newer investors to pay older investors…

business rescuers are only interested in their own well being, they are a law unto themselves. The law is very limited as far as them acting in the best interest of the the company and creditors, their discretion is taken as “the best” basically a law unto themselves like Eskom…. the fact that they appointed an accountant to investigate Sura affairs and to express an opinion has a huge independence issue as far as the audit is concerned…… his opinion on sura is less than worthless in fact….

I am a final year bcom accounting student so i am very familiar with the law and the banks act….let me put this in a nut shell for you, the reason sura was declared doing the business of a bank was because other member’s payments for bottled water was used to cover profits. In other words money was just changing hands like the banks do..

Let me pose a question to you, lets assume sura was able to cover all profits due to members from the sale of bottled water? none of this would be happening in fact by now sura would be the best performing bottled water company in the country. I believe the accountant of the business rescuers said that the business model of sura pure is fundamentally flawed ? what a joke…

I took the initiative to speak to a international company that specialize in passive income business models and explained the Sura model to them, they explained that all that needs to be done is reduce the profit per bottle to members or extend the business cycle. Yes ladies and gentleman it is as simple as that …he offered to show this on an excel spreadsheet but at a price but I explained that I merely wanted to know if there was anything wrong with the model.

A bit of advise instead of listening to these big shots and take their word as gold do your own investigations. Mr Van de Merve is a business man if he intended to rob people why would he go through all the effort to register the company legitimately, follow all legal requirements, have all necessary documentation to run the business and as a further measure he did not even try to hide who he is or where he stays …..we know how scams work, the founders make a show and disappear overnight with out a trace…..Yet here is Mr Van De Merve we know who he is and he is fighting this legal battle alone…Makes me wonder who the real criminals are in this whole story

The banks, the law, the business rescuers, the accountants. All these educated/”informed” bodies use their skills and knowledge to destroy Sura instead of seeing the company for what it really is….a game changer ….it would only be a matter of time before Billion rand companies like coke and pepsi adopt the business model. Finally a way to reduce the gap between rich a poor in this country and nothing is being done to help sura……When Mr Van De Merve wins this legal battle and continues surapure with much more support and guidance, history will be made and a new dawn shall begin in this country.

i only felt my money was gone when SuraPure’s account was frozen by FNB

My view is that People must have a currency and People’s bank of their choice . When KIPI showed us light in May this year, we realised that Bitcoin currency started in 2009 and have no involvement with SARB but only 2 people(buyer and seller). Another currency that is growing fast is One coin. People must start to use and put value on these cryptocurrencies and leave SARB and its journalists alone. Basically you can send R250,000,000 worth of bITCOINS outside the country without asking permission from SARB and its journalists. Lets destroy the SARB and its Banks!!!
We also need to form People’s court and network association so that we can fight this battle. Enough is enough, SARB have stolen our monies without being challenged.

Seems like this Cornelius van der Merwe did not give up on conning people, he also went on to open another scam IDP aka Invest Daily Profit and people are still waiting for payouts. After being swung excuses since last year September.

End of comments.

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