The FSCA has imposed a fine of more than R216 million on Coenraad “Coenie” Botha and debarred him for 10 years for contravening the Banks Act.
The Authority identified Botha (full name: Coenraad Barend Nolte Botha) as the director of CBI X SA (Pty) Ltd and the founder of Coin Based Innovation Global, also known as CBI Association.
Botha, through the CBI entities, solicited investments from the public by promising unrealistic returns of 1% to 4% a week, the FSCA said in a statement on 28 March.
An investigation by the Authority found there was no legitimate financial product or investment activity that generated the purported returns paid to investors by Botha and the CBI entities.
The FSCA found that Botha, CBI X SA, and CBI Association contravened section 11(1) of the Banks Act from 19 March 2019 to 6 January 2022.
Section 11(1) probits a person from conducting the business of a bank unless such person is a public company and is registered as a bank in terms of the Act.
The actual fine is R216 051 141 and is payable within 30 days from the date of the FSCA’s order, 25 March. Botha can apply to the Financial Services Tribunal to have his debarment and fine reconsidered.
The Authority warned the public in April 2022 that it was investigating Uhuru Tribe, Uhuru-X, Uhuru Cash, CBI X SA, CBI Global, and Botha because it suspected they might be conducting unregistered financial services business.
None of the “investigated parties” is authorised to render financial advisory or intermediary services in terms of the FAIS Act.
It appears that Uhuru Tribe was launched in 2018 and rebranded as CBI in 2020.
Arrest and re-arrest in Namibia
Meanwhile, the authorities in Namibia are seeking to convict Botha, also for allegedly taking deposits from the public without a banking licence.
Botha ran an investment scheme, which he described as a cryptocurrency exchange, through CBI Exchange Namibia (Pty) Ltd, of which he is a director. This entity was formerly known as Uhuru Tribe or Uhuru Cash.
The Bank of Namibia said on 13 March that its investigation found that neither CBI Exchange nor Botha was authorised by the central bank to conduct banking business, or to receive, accept, or take deposits from the public.
On the same day, Botha (69) and his wife, Charlotte Murove (32), appeared in the Windhoek Magistrate’s Court on 64 charges.
They were charged with one count of fraud, 31 counts of conducting a banking business without authorisation, 31 counts of money laundering, and one count of conducting a Ponzi scheme.
In the fraud charge, the State alleges that Botha and Murove misrepresented to investors, from 2018 to 2022, that they were operating a legitimate business authorised to receive investments from the public and that such investments would grow with interest, while knowing they were not authorised to receive any deposits or investments from members of the public.
It is also alleged that investors paid them some N$163 million.
The magistrate ordered Botha and Murove to be released because their arrest was unlawful.
The Namibian police did not initially arrest Botha and Murove on a charge of fraud, for which no arrest warrant was required, but for alleged contraventions of the Banking Institutions Act and the Prevention of Organised Crime Act, for which warrants of arrest were required before they could be taken into police custody.
The couple was arrested on 11 March at the Buitepos border post between Namibia and Botswana.
According to the State, the police suspected the couple was planning to flee to Dubai. Botha testified that he and Murove wanted to travel to South Africa to visit friends.
The court ordered Botha and Murove to be released, and their case was struck from the roll. But, once the police got their paperwork in order, they were re-arrested on 22 March.
The couple appeared in court and have applied for bail, which the State has opposed.
The Bank of Namibia and CBI Exchange have been involved in litigation in the High Court and the Supreme Court after the central bank had CBI’s bank account frozen in March 2022.
Seems like the FSCA is on a roll. More fines than a fat traffic cop at Christmas. And none of the money they are getting goes to the ‘investors’ who lost their money. So if they are taking money from the crooks and keeping it, what does that make the FSCA?