Report 65 Business Practices Committee8. Conclusion and Recommendations |
It appeared that Roberts often went abroad. During 1 994 he went overseas 14 times for a total of 158 days. The corresponding visits and days for 1995 and 1998 were respectively 10 times and 108 days and 13 times and 187 days. During the first four months of 1997 he went overseas on five occasions for a total of 74 days. Since January 1994 to April 1 997 he thus undertook 42 overseas visits and stayed for a total of 527 days. The costs, in excess of R1 million, attached to these visits were paid for by the clients who "applied" for "overseas loans".
Roberts represented to his clients that he was able to secure loans and/or the necessary guarantees on their behalf. He could never do so over a number of years, yet kept on accepting their monies to frequently go overseas. For what purpose?
With the available evidence it also seems that Roberts contravened Notice 777 which appeared in the Government Gazette of 18 August 1995. In this notice the Minister placed a prohibition on the receipt of monies and other consideration for the arrangement of loans. This matter will be brought to the attention of the CCU.
Over the years the Committee has observed that many South African consumers are extremely credulous and even naive about financial matters. This observation of the Committee was reinforced by the behaviour of the clients (victims) of Roberts and Urquhart. The victims confidently believed that it was possible, even certain, to obtain loans from abroad at low interest rates while their unfortunate and less astute fellow South Africans were paying South African prime rate plus for their local loans. The loans negotiated and "approved" never materialised. The applicants were led to believe they would receive the loans for which they had applied.
The business practices of Kenneth Herbert Roberts, in the opinion of the Committee constituted harmful business practices. There are no grounds justifying the practices in the public interest. The Committee has consequently resolved to recommend to the Minister that in terms of section 12(1)(b) and (c) of the Harmful Business Practices Act he declares unlawful the business practices whereby:
| i) | Kenneth Herbert Roberts, directly or indirectly, in respect of: |
| a) | a money lending application, demands, receives or recovers any valuable consideration (the consideration) from the borrower or from any person so applying, whether on his own account or for any person other than the moneylender; until the amount of money to be borrowed has been deposited into a bank account; and being an account in respect of which only the borrower shall be authorised to withdraw any funds; |
| b) | an interim transaction, namely the design of a feasibility study, a business plan, a cash flow plan, a market research project, the arrangement of a letter of commitment, the arrangement of an irrevocable letter of commitment to issue a guarantee and the issuing of an irrevocable letter of commitment to issue a guarantee that would lead or purport to lead to a money lending application, demands, receives or recovers any valuable consideration (the consideration) from the borrower or from any person so applying, whether on his own account or for any person other than the moneylender; until the amount of money to be borrowed has been deposited into a bank account; and being an account in respect of which only the borrower shall be authorised to withdraw any funds; |
| c) | convey the impression in advertisements that they can arrange financing of whatever nature |
and
directs Kenneth Herbert Roberts to
| a) | refrain from applying the harmful business practice; |
| b) | cease to have any interest in a business or type of business which applies the harmful business practice or to derive any income therefrom; |
| c) | refrain from at any time applying the harmful business practice; and |
| d) | refrain from at any time obtaining any interest in or deriving any income from a business or type of business applying the harmful business practice. |
LOUISE A TAGER
CHAIRMAN: BUSINESS PRACTICES COMMITTEE
12 November 1998