The SA Police Service says it expects South Africa’s self-proclaimed youngest millionaire Sandile Shezi to hand himself over as part of a fraud investigation, The Sunday Times reports.
Last week, City Press reported the police had issued a warrant for his arrest after a fraud case was opened at the Sandton Police Station.
Shezi runs a company called Global Forex Institute (GFI) and hosts seminars where he teaches how to trade in foreign exchange.
He claims he is the country’s youngest forex trader to have made millions through cryptocurrency trading and flaunts his Mercedes-Benz G-wagon and Maserati sportscar on social media.
Two attendees of GFI’s events have come forward and accused Shezi of defrauding them.
They claimed Shezi agreed to trade money for them, pay them a profit every year, and then the total amount they initially invested — which they say he did not do.
One of the attendees, who paid Shezi R500,000 in 2018, became suspicious after discovering the law firm used to draw up the contracts had no relationship with Shezi.
Police spokesperson Captain Mavela Masondo told The Sunday Times that the investigating officer on the case had been in contact with Shezi’s lawyers. He was expected to hand himself over to the police.
Shezi has denied that he traded or invested on behalf of clients and said his company was not a financial services provider.
“These shareholders signed up, not for investments, but our education programme,” Shezi told The Sunday Times.
“Our training includes technical analysis, fundamentals and a bit of this and that.”
“You go through us to run your own small personal portfolio, not trade for HSBC,” he added.
Shezi called the shareholders’ accusations strange “when they were part and parcel of the business and sold the business’s services”.
He added that he was making arrangements with his shareholders to buy them out.
MyBroadband previously spoke to the FSCA’s Divisional Executive for Enforcement & Market Integrity, Brandon Topham, about how South Africans can best protect themselves from investment scams.
Topham highlighted five main factors to consider in determining the legitimacy of an investment:
- The claimed return on investment rate.
- The use of computer software to perform trades.
- The technical and complicated jargon used in the investment proposal.
- The involvement of credible advisors.
- The track records of the people running the investment scheme.
Topham warned if the return being advertised was unrealistic compared to the banks’ prime overdraft rate, it was clearly a scam.
“The higher the return, the higher the risk associated with any ‘investment’. When a return is exceptional, it is a fraud,” he stated.
“Most investment managers are trying to beat inflation by a few percent. Inflation is currently 3% for this purpose.”
He added that these managers were technically trained, qualified and experienced persons who battled to beat inflation in many cases.
Shezi holds a national diploma in public relations and applied communications.
MyBroadband contacted Shezi for comment. He did not respond by the time of publication.