Report 73 Business Practices Committee4. VdDussen's Meeting with the Committee on 8 October 1998 |
During a meeting of the Committee on 8 October 1998, attended by VdDussen and his lawyer, VdDussen admitted that he took monies from "new investors" to pay interest to "previous or earlier investors". The Chairman of the Committee put it to VdDussen and his lawyer that the Committee regarded this practice as a harmful business practice in terms of section 1 of the Act.
VdDussen was requested immediately to stop the harmful business practice and come to an agreement with the Committee in terms of section 9 of the Act. The arrangement would include a commitment by VdDussen to cease the practice whereby investments are accepted from "new clients" and used partially to pay "previous clients". Failure on his part to do so would result in a section 8(1)(a) (13) investigation by the Committee into the business practices of VdDussen and his businesses. Officials of the Committee were to come to an agreement with VdDussen which would be acceptable to the Committee.
| 12) | The Usury Act is at present, under certain circumstances, not applicable to loans granted under R6 000. Entities that grant loans of less than R6 000 are known as "micro" lenders. Louhen is a firm that sell "micro" lender franchises. |
| 13) | In terms of the Act the Committee could undertake a section 4(1)(c) or a section 8(1)(a) investigation into the business practices of a particular entity or individual. A section 4(1)(c) investigation enables the Committee to make such preliminary investigation as it may consider necessary into, or confer with any interested party in connection with, any harmful business practice which allegedly exists or may come into existence. Notice of section 4(1)(c) investigations is not published in the Government Gazette as opposed to section 8(1)(a) investigations. The purpose of section 4(1)(c) investigations is to enable the Committee to make a more informed decision as to whether a section 8(1)(a) investigation is called for. The Minister of Trade and Industry is not empowered to make any decisions on the strength of a section 4(1)(c) investigation. He may do so in terms of a section 8 investigation. |