6 February 2013

Namibia: Pyramids Face Legal Action

THE Bank of Namibia (BoN) is proceeding with legal steps against U-Care, Gold Prime Time and Penta Stream Investments after the three pyramid schemes snubbed the central bank's deadline to repay the money they've raised illegally from members.

After thorough investigation into the activities of the three entities, BoN Governor Ipumbu Shiimi last November outlawed them as pyramid schemes. Shiimi ordered U-Care, Gold Prime Time and Penta Stream Investments to fully refund their members within 14 days or face the wrath of the law, in this case the Banking Institutions Act.

Only Penta Stream Investments, also known as Penta Gold or Pincode, has attempted to heed the warning, allegedly repaying 15 people so far, BoN's director of strategic communications and financial sector development, Ndangi Katoma, told The Namibian. Although Gold Prime Time promised to pay back the money, nothing has happened to date.

U-Care, on the other hand, informed the BoN that it won't honour the central bank's directive, but intend to settle the dispute in court, Katoma said.

"Given the poor repayment executions noted since the directive last year, the bank has resolved to proceed with legal action against the three pyramid schemes," he said.

Shiimi last year called on those who had lost money to the three schemes to contact the BoN.

Feedback showed that the public had either paid over or invested about N$2,8 million with U-Care, Penta Gold or Gold Prime Time, Katoma said.

"However, this amount is expected to increase as members of the public are still registering their details with the Bank of Namibia," he said.

Shiimi last year said the BoN would use its power to initiate both civil and criminal steps against the schemes. It will apply to the court to have the schemes declared insolvent and it will hand them over to the police.

If prosecuted and found guilty of contravening the Banking Institutions Act, those running the pyramid schemes can face a fine of up to N$1 million, ten years in prison, or both.

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