Crowd-funding platform Livestock Wealth has refuted allegations that it may be operating its online investment services illegally.
It tells ITWeb that it is co-operating fully with the investigations of the Financial Sector Conduct Authority (FSCA).
This, after the FSCA yesterday released a statement announcing the online investment platform is under investigation and may be operating illegally, without registering with the financial authority.
In the statement, the FSCA warns the public to be cautious when dealing with the investment company’s insurance arm Livestock Wealth Financial Services (Livestock FS) and Livestock Wealth.
The authority points out that Livestock Wealth is not authorised to render any financial services-related business in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act).
However, Livestock FS is a licensed financial service provider, with FSP number 51237, licensed to render category one financial products (insurance) and services, it says.
The FSCA explains: “It has come to the attention of the FSCA that Livestock Wealth may be unlawfully offering members of the public investment into livestock and/or agricultural product(s), offering profitable returns upon maturity of the livestock and/or agricultural product(s).
“It is of concern that Livestock Wealth has also been making use of Livestock FS’s financial service provider number on Livestock Wealth’s website. As a result, the authority has commenced an investigation into Livestock Wealth.
“Livestock Wealth is currently under investigation by the FSCA. We therefore caution the public when doing financial services business with Livestock Wealth.”
The FSCA emphasises that the investigations are not completed and it has made no findings to date.
Founded in 2015 by electro-mechanical engineer Ntuthuko Shezi, Livestock Wealth says it has helped thousands of people to invest in tangible, agricultural assets, such as cattle-breeding, free-range oxen, organic garden tunnels and macadamia nut trees via its platform, at an interest that is higher than mainstream investment options (9% interest per annum).
Through connecting its network of small-scale partner farmers to online investors, the business model offers investors an opportunity to invest in agricultural assets, which are not influenced by financial market trends.
Responding to the FSCA statement, Livestock Wealth CEO Shezi tells ITWeb he was previously informed by the FSCA that companies trading in agricultural goods are not required by law to register with the financial authority.
“We obtained an FSP licence in October 2021 for Livestock Wealth Financial Services, which is wholly-owned by Livestock Wealth. However, Livestock Wealth is not registered with the FSCA.
“Until recently, we were under the impression that Livestock Wealth was operating legally following correspondence from the FSCA in 2015 indicating that we did not need a licence to sell agricultural assets, after we proactively approached them in an attempt to register.
“Following the FSCA’s statement this week, we are co-operating fully with them to ascertain the reasons for their concerns and to ensure we are operating within the letter of the law,” explains Shezi.
He says Livestock Wealth FS is in the process of setting up insurance cover, which would insure its network of farmers against any disturbance or risk in their operations, while safeguarding customers’ timely return on investment.
On its website, the company says it has generated profit in excess of R20.6 million for its investors, since inception.
In 2022, Shezi told ITWeb the company planned to establish a presence in the Southern African Development Community region, after securing a R10 million funding boost from the Mineworkers Investment Company, through the Khulisani Ventures investment vehicle.
At the time, the start-up said it had grown its asset valuation, to become a R100 million business.
To check if an individual or entity is authorised, the FSCA urges the public to call the toll-free number: 0800 110 443 or conduct an online search.