Libertas GH: Where did investors’ crypto millions go?

An alleged crypto investment scheme linked to Mauritius-born Ahmad Yasin Hossenbocus is under intense scrutiny after a former business rescue practitioner resigned, citing a lack of evidence that sufficient funds exist to support the rescue process. IRS Forensic Investigations has questioned the investment model and investors are asking what became of the money.

Mounting investor concern

Investor complaints about halted consideration payments have grown as explanations from the company have shifted over time. According to The Citizen, Chad Thomas of IRS Forensic Investigations has said that Libertas GH told investors their funds were deployed in various ventures, including a cryptocurrency mining operation and later a local plastic-to-diesel plant, and that some funds were said to be tied up in a transaction in Europe.

Thomas has suggested the often-cited figure of around R120 million, raised from roughly 200 investors, may understate the exposure. He has also indicated that additional investors including groups in Pietermaritzburg and some abroad could put the potential amount closer to R600 million to R800 million. Thomas has questioned whether the company’s investment model complied with South African financial regulation.

Resignation of business rescue practitioner

The Citizen reports former business rescue practitioner Danie van Jaarsveld resigned after reviewing Libertas GH’s records and concluding he had not been given sufficient evidence of funding to support the ongoing business rescue proceedings and related investigations. In his resignation letter, seen by The Citizen, van Jaarsveld wrote that material differences had emerged between himself and the director over the affairs of the company and the conduct of the rescue.

“A tremendous amount of money came in. The question is: where is the money? He said it was there, but I could not see the value,” van Jaarsveld said.

Company response and denials

Libertas GH’s consulting attorney, Paresh Pursooth, rejected allegations the company operated as a Ponzi scheme.

“I will say emphatically that the unsubstantiated and foolish notion that the entity is running a Ponzi scheme is dispelled in its entirety,” Pursooth told The Citizen.

Pursooth also said that the acceptance of the business rescue practitioners’ appointment indicated a basis for the rescue process and criticised critics by name. He disputed suggestions that investor returns constituted interest under Islamic law, saying investors who believed they were receiving interest should be questioned on ethical grounds.

Outstanding requests for comment

The Citizen attempted to obtain comment from the newly appointed business rescue practitioner, Thomas Samons; detailed questions were also sent to Ahmad Yasin Hossenbocus via WhatsApp after his cellphone number was independently confirmed, and The Citizen reports there had been no response by the time of publication.

What investors want

Representatives for investors told The Citizen they want regulators to examine whether Libertas GH had the necessary approvals to take and invest third-party funds and whether the business model complied with the Financial Advisory and Intermediary Services Act and the Bank Act. They also seek clarity on the location and nature of assets said to underpin the investments.

Red flags for investors

The Citizen cites investor-protection guidance identifying common warning signs of fraud, including unlicensed advisers, promises of guaranteed returns, high-pressure sales tactics, sensational pitches with fake testimonials and requests to pay by wire transfer or gift card. The guidance recommends asking questions, researching opportunities thoroughly and conducting background checks on investment professionals.

As investors press for documentary proof of where funds were deployed and what assets exist to repay investors, the future of Libertas GH’s business rescue process remains uncertain.