Cape Town – The fall from grace of alleged Ponzi scheme runner Pastor Colin Davids has become clearer and he appears to be on the brink of losing R87million.
Davids, the director of Platinum Forex Group, has been at the centre of a legal battle with the Asset and Forfeiture Unit over allegations he was running a Ponzi scheme.
He is also a pastor at New Direction Church in Parow.
The 49-year-old has made a reported R329million from over 2000 investors since starting his company back in 2009.
It allegedly financed his luxurious life and bankrolled expensive properties in Plattekloof and Hermanus as well as several luxury vehicles.
An auditing report by Ernest and Young into his and the company’s finances has now attempted to strengthen the case that Davids was running an alleged Ponzi scheme.
“The institution’s income from forex profits and forex commissions earned on the number of trades done and other business activities of R26 million was insufficient to fund repayments made to investors and business expenses of the institution totalling R233 million,” reads the report.
“The institution primarily received investor funds to sustain the business as deposits from investors of R329 million amounts to 92 percent of the total inflows of R357 million,” the report concludes.
According to the investigation, Davids, who was CEO of his company, listed his 22-year-old daughter Charlize and wife, Charlyn Davids, as directors in his multimillion rand business.
But the high life the Davids family was accustomed to runs the risk of running dry if the AFU’s application to finalise a forfeiture order against him is granted.
Over three bank accounts in Davids’ name were frozen by the state containing more than R52 million, a business account in the company’s name had R35 million in it totalling up to R87 million.
Three BMWs, two Jaguars, a Land Rover and Volvo owned by Davids were also placed under curatorship.
Davids registered the company seven years ago which operated from the house he rented for his company’s financial director.
The audit shows the company used three websites, a Facebook page and flyers to market the business.
Investors from Davids’s business would reportedly receive R500 for referring new investors to the company.