In what a Business Day report says is yet another ruling against Silver Seed Capital, the ombud for financial services providers Naresh Tulsie has ordered the Cape Town business and its director Sandro Manuel Azevedo Veloza to pay back the full amount invested by Dr Molehi Walter Kgaile.

The report notes this is not the first time Silver Seed has been on the receiving end of an ombud ruling, with previous investigations showing the company was used to lure unsuspecting investors with promises of extravagant, guaranteed returns from a risky, unlisted platinum mining venture.

The ombud found that Veloza was also conflicted in that he was both a director and company secretary for UG2 Platinum, which he advised clients to invest in for great returns.

More than a decade later, Kgaile hasn’t seen his money nor heard from Veloza.

In his ruling, Tulsie ordered Silver Seed to return the full amount invested in four tranches. The ombud is also referring the case for further investigation and potential action to the Financial Services Conduct Authority (FSCA).

Tulsie also recommended that Kgaile report Veloza and Silver Seed to the police’s Commercial Crimes Unit.

The FSCA withdrew Silver Seed’s licence in 2014.

In its rulings in March this year, Tulsie ordered the company to reimburse Johannes van Zyl and Lionel White R100 000 and R35 000 they invested in 2012 and 2005/2007, respectively.

The most recent case flouts various sections of the Financial Advisory and Intermediary Services Act.

In his determination, Tulsie says: ‘The respondent has a calculated modus operandi of targeting selected investors under the auspice of extravagant returns, with no evidence as to how these returns would be paid.’

Full Business Day report