Business Practices Committee Report 79

Investigating officials of the Committee visited the offices of Metro in Springs on 29 March 2000 and held discussions with Beswick. During May 2000 officials visited the offices of Metro on three occasions. The documents obtained from the complainant were discussed with Bezwick on 29 March 2000.

Metro Cash Loans (Pty) Ltd initially took money in the form of loans from the public. It was advised by its legal representatives that it might contravene the Banks Act. The directors of Metro Cash Loans (Pty) Ltd thus resolved to convert Metro Cash Loans (Pty) Ltd to Metro Cash Loans Ltd (Metro) and issue shares to the public. The issued share capital of Metro is 25 million shares of one cent each. It appears from documents which the Committee received from "X" that the management of Metro took up 13 million shares and that the remaining 12 million shares were to be taken up by the public at R1 each. It was later established that the 25 million shares in Metro were all taken up by Holsthauzen at one cent each. He thus paid R250 000 for the 25 million shares. The officials could not establish whether Holsthauzen paid for the shares from his own personal funds or whether the R250 000 was paid from the loans advanced to him in his personal capacity by investors.

Holsthauzen then "donated" 100 shares each to the following six persons: Beswick, Ms T Oosthuizen, who was responsible for the cash loans offices, Ms R T Strydom, secretary of Metro and who was also responsible for the debits of the cash book, Mr N Meyer of D J Meyer and Associates and at that time bookkeeper of Metro, Mr G Holsthauzen, who was responsible for the "maintenance" of the cash loans offices and Mr B Seaward who left the company towards the end of January 2000 and who held the title "Regional Managing Director".

A Metro share certificate showed that Holsthauzen held 24999400 shares. During January 2000 "X" bought 40000 shares at R1 each.