IT in Banking

MyBucks pursues former SA execs in R100m investment probe

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Frankfurt-listed fintech firm MyBucks is pursuing former senior executives at its South African subsidiary, VSS Financial Service, for alleged financial mismanagement and accounting irregularities.

The unravelling of the alleged “irregularities” resulted from a damning forensic investigation that the company says justifies its move “to bring justice to bear and to seek rectification from those individuals that the report clearly identifies as having prejudiced VSS and its stakeholders”.

The investigation probed the merits of a R100 million investment in MyBucks by JSE-listed services group Ecsponent.

Ecsponent concluded the investment deal in January 2019 with the Luxemburg-based and Frankfurt Stock Exchange-listed fintech innovator, MyBucks.

At the time, Ecsponent said, MyBucks was a perfect fit in respect of the group's target profile, as the internationally-listed company offered a high-technology, high-profit margin business, while providing significant barriers to entry.

However, Ecsponent conducted its own internal investigation after fears that the worthiness of the investment may have been falsified.

After the internal appraisal, Ecsponent instituted an independent forensic probe into “possible misrepresentation on the merits and purpose of the investment at the time of the initial investment proposal, which may have ultimately resulted in financial loss to the company”.

Centurion-based Kahamelo Forensic Services investigated the matter and has now presented its findings.

In a statement, MyBucks says: “MyBucks SA believes that certain former directors and executives, as well as certain service providers, should answer for the clear lack of corporate governance, as well as financial mismanagement, accounting irregularities and failure to act in the best interests of the company and its stakeholders.”

MyBucks SA’s controlling shareholder, Afristrat Investment Holdings, has agreed to collaborate in the process.

“The findings justify, in the opinion of the board, that MyBucks SA should, together with other affected parties and stakeholders, consolidate their resources to bring justice to bear and to seek rectification from those individuals that the report clearly identifies as having prejudiced VSS and its stakeholders.”

The African-focused fintech company offers unsecured consumer loans, banking solutions and insurance products to customers through its three brands GetBucks, GetSure and GetBanked.

MyBucks has experienced exponential growth since its inception in 2011 and today has operations in nine African and two European countries.

The company held its electronic general meeting on Friday and discussed the disposal of MyBucks Mozambique (MBC) as well as the results of the forensic investigation into VSS.

MyBucks announced it had received approval from the Bank of Mozambique for the disposal of its 96.5% shareholding in MBC to Xtenda Financial Holdings.

“The proceeds of approximately €11.3 million will be fully applied to the settlement of third-parties.”

Furthermore, the meeting resolved MyBucks will commence with delisting from the Frankfurt Stock Exchange.

MyBucks said it agreed to terminate the inclusion of the company’s shares in the regulated unofficial market (Freiverkehr) on the Frankfurt Stock Exchange.

“It must be assumed that the Frankfurt Stock Exchange will cease trading the shares immediately following the expiry of the notice period. As a result of this, the company anticipates that the other stock exchanges on which the shares are traded will also cease trading the shares.”

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