A greater image has emerged of what occurred to the R1.4 billion ploughed by investors into foreign currency trading firm Imagina FX, which was positioned in liquidation in October 2020 when the corporate put a freeze on withdrawals.
In May this 12 months, court-appointed liquidator Christian Bester of JJS Administrators despatched out a discover to investors, and it’s not excellent news.
Of the R1.42 billion deposited into Imagina FX, solely roughly R280 million was used for buying and selling. “From the approximately R280 million, only R8 million was returned to Imagina FX and it would appear there was a trading loss of approximately R272 million,” reads the discover.
As for the remaining, R879 million was repaid or transferred again to investors. The steadiness was used to pay administrators, consultants, operational bills “and other related third parties such as Massyn’s family trusts”.
Imagina FX was managed by Cape Town-based Craig Massyn, who was additionally the lead foreign exchange dealer.
Complicating the image is that the identical crew of “experienced traders” managing Imagina FX was additionally behind numerous different firm funds beneath the names Praesidium and Octox.
Read: Imagina FX founder Craig Massyn defends sequestration try
Accountants@Law has been introduced in to hint the difficult move of funds between the businesses and to see the place the cash went.
Many investors had been paying funds into the FNB banking account of Octox, believing this was the banking account of Imagina FX. The Octox checking account was managed by Massyn.
Returns to rejoice in …
Imagina FX and its sister firm Praesidium had been extraordinarily profitable in roping in investors from around the globe with marketed returns ranging between 43.5% and 74.3% for the 4 years to 2019. Its advertising and marketing materials pumped up these market-thrashing returns as a come-on for extra funding funds.
If that each one sounded too good to be true, it was. In June 2020, investors had been knowledgeable of a “black swan” occasion in the type of Covid that had triggered a 40% drawdown in funds.
This was the primary loss introduced by the corporate in 5 years. To calm investors’ rattled nerves, the corporate stated a turnaround technique had been put in place to recuperate from these losses, merchants would work longer hours, and investors might anticipate quicker communication from the corporate.
Not lengthy thereafter, the corporate stopped paying out investors who needed to withdraw funds. It was at this level they rushed to courtroom to position Imagina FX and Praesidium in liquidation.
Secrecy
A former worker of the corporate, who requested to not be named, instructed Moneyweb that the foreign currency trading crew operated in digital secrecy, so it was inconceivable to see in the event that they had been truly buying and selling and making earnings as claimed.
Read: Two foreign currency trading corporations go belly-up, owing investors upwards of R1bn
“The liquidators have not managed to recover any funds of significant value in Imagina FX,” Bester warned investors in May.
“The bank accounts were depleted, and the known trading accounts in Cyprus which were frozen appeared to record a loss. The fact that there [are] no available funds make[s] any investigation extremely difficult, as most experts or professional service providers are not prepared to render services ‘on spec’,” he added.
Legal prices incurred by the liquidators to this point seem to exceed R10 million, which means that until funds are recovered from someplace, there isn’t a prospect of a return of funds to investors or to collectors.
The liquidators are actually exploring the opportunity of recovering funds from ‘impeachable transactions’ that are transactions entered into by an bancrupt firm previous to liquidation.
Sound acquainted?
This begins to tackle the complexion of Mirror Trading International (MTI), the liquidated bitcoin (BTC) scheme that raked in near 30 000 BTC with guarantees of returns of 10% a month utilizing a computerised buying and selling system.
Read:
US costs Steynberg and MTI with defrauding 23 000 investors
MTI liquidators fireplace again at try to take away them
Creditors voice fury at MTI liquidators in any case investor claims rejected
Investigations by the Financial Sector Conduct Authority (FSCA) discovered no proof of any profitable buying and selling by MTI, and the liquidators have requested the courtroom to declare it a Ponzi scheme, in which case all payouts obtained by investors must be returned.
It isn’t sure that the identical destiny awaits Imagina FX investors, although funds paid out to Massyn’s household trusts and different beneficiaries might definitely be focused.
Massyn has been sequestrated by the liquidators, an motion he opposed.
Massyn introduced a courtroom utility to keep away from testifying earlier than an inquiry set as much as examine the affairs of the corporate, however was unsuccessful.
An order for the restoration of R1.2 million from his spouse was obtained by the liquidators in October 2021. An utility has additionally been initiated for the restoration of funds from Massyn’s sister-in-law.
