July 24, 2010
By Neesa Moodley-isaacs
In a fifth ruling related to the Garek share investment scam, KwaZulu-Natal broker Andre van der Merwe was again ordered to reimburse clients for losses based on his advice, bringing the total amount he has been ordered to pay back to clients to R500 000 plus interest.
Noluntu Bam, the Ombud for Financial Services Providers, this week ordered Van der Merwe to repay an Umzumbe couple R320 000 plus interest of 15.5 percent from October 2005 to the date of payment.
Charles Pillai, the former financial services ombud, issued the first ruling against Van der Merwe at the end of February this year, and Bam issued three rulings against him in April.
Theo and Mary Wood jointly invested R430 000 in Garek and Global Environmental Technologies (GET) in October 2005, on Van der Merwe's advice.
He had told the Woods that Garek listed on the JSE in June 2005 and that GET was about to list on the London Stock Exchange.
Theo Wood later discovered that Garek had never listed on the JSE, while listing dates for GET passed with no listing taking place. Wood then demanded repayment of his entire investment.
When Wood asked Van der Merwe what his commission on the transaction had been, he was told it was five percent. Wood later heard that Van der Merwe was publicly telling people that his commission was 20 percent.
Wood laid a complaint with Bam's office in November 2006.
Van der Merwe told Bam's office that he had reached an agreement with Wood, and in October 2007 he repaid Wood R110 000. Although he promised several times to repay the balance of the investment, this did not happen.
Van der Merwe failed to respond to further communication from Bam's office regarding the outstanding money to be paid back to the Woods.
Van der Merwe was also ordered to pay the case fee of R1 000.
  
 
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