Untangling Ecsponent’s E1.5 billion heist web

By Muzi Dlamini

Ecsponent, the company that made off with over E340 million from investors in Eswatini has left a trail of financial misfortunes in at least three other countries.

Investigations carried out by the Eswatini Financial Times have uncovered that David Van Niekerk and his accomplices are also under investigation in Botswana, South Africa, and Zambia for allegedly swindling investors to the tune of E1.5 billion through the same modus operandi. The investigation which looked into some of the companies which were linked to Van Niekerk which operated in other Southern African countries have opened blown the lid on the scheme and revealed that the over 1 500 emaSwati are noted in this anguish alone.

In South Africa, there are about 2 800 preference shareholders who invested and lost over E1 billion investments through Ecsponent. In Botswana, there were about 2 000 investors who lost about E150 million (P120 million) through FirstCred micro-finance institution (MyBucks). In Zambia, at least 66 000 people were also fleeced but the exact amount couldn’t be ascertained. The fleecing operation in almost all the jurisdictions in which he once ran businesses was characterized as inter-company loans mainly where hefty amounts of money were flowing from one company and carted away to related parties in Mauritius and South Africa until there was nothing left to pay creditors and investors.

Notably, in almost all the jurisdictions, the companies which were allegedly used as conduits to loot monies from unsuspecting creditors and investors were founded by Van Niekerk but at some point, he relinquished his directorship. Notable companies which are in one way, or another, featured prominently in the alleged fleecing are Ecsponent Limited now Afristrat Investment Holdings Limited, GetBucks, and MyBucks. According to Edison Investment Research, Ecsponent was one of MyBucks’ major shareholders with a 42.97 per cent stake as of the end of March 2020. Curiously, Edison Investment Research had noted that MHMK (Ecsponent’s parent company) also has a direct holding in MBC (MyBucks) and, together with its indirect holding through Ecsponent, has a majority stake in the company (63 per cent according to Bloomberg data as of September 15, 2020).

ALSO READ: ‘I did not run from the Court’ – Van Niekerk

In Eswatini, it has been reliably established that the funds were channeled from Ecsponent Limited Eswatini as loans to Ecsponent Holdings Eswatini and then to three other enterprises, namely, Ecsponent Enterprise Development Eswatini, GetBucks Eswatini and Ecsponent Treasury Services in South Africa. These three further transferred part of the money as loans to their South African sister companies, which are Zechron South Africa PTY (LTD) and GetBucks South Africa. The latter allegedly loaned the money to another sister company, VSS Financial Services in South Africa and to MyBucks Luxembourg. All these companies were linked to Global Fintech entrepreneur Dave Van Niekerk, who then
founded Status Capital in Eswatini in 2020.

In the case of Botswana, Dave Van Nierkerk’s name cropped up in court papers in a matter in which micro-lender FirstCred Limited was embroiled in a drawn-out tussle for money with its creditors. FirstCred CEO Dudu Garekwe dropped the name of Dave van Niekerk as the mastermind. FirstCred began life under the name GetBucks Limited, trading as GetBucks Botswana. According to FirstCred CEO in the court papers, the notes raised an aggregate amount of P200 million (about E250 million) which she told the court that most of it was looted by former management led by van Niekerk.

According to Edison Investment Research, a research firm with offices in North America, Europe, the Middle East and Asia Pacific, MyBucks has been a troubled company. It had accumulated mounds of debt under its brands and was incurring losses as well.

Meanwhile, it has been recently reported by South African media that almost all of the E1.5 billion investment by JSE-listed Afristrat Investment Holdings Limited in Frankfurt-listed MyBucks SA, a microlender in several southern African countries that collapsed and is now in liquidation, has been lost.

In Eswatini, the ESW Investment group is determined to bring the alleged perennial looters to book. Recently, through its attorneys, SV Mdladla Attonerys, ESW Investment Group which acquired Ecsponent Eswatini approached the court on an urgent basis after learning that the duo were in the country. ESW sought a court order to prevent the two former Ecsponent directors from leaving the country as they believed that they were the definite alter-egos of Ecsponent Eswatini (PTY) LTD and GetBucks South Africa.

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