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SuraPure: Pyramid scheme or not?

Cape Town - Hundreds of investors are left out of pocket and clueless as to their investments in SuraPure Drinks Company after FNB froze the company's bank account.

The drinks company, describing itself as SuraPure Drinks (Pty) Ltd, a registered private company which produces 100% fruit juice, soft drinks, mineral and sparkling water, is providing potential investors with a "business opportunity aimed at fighting poverty and providing people with financial freedom".

The company claims that its products are distributed to macro retailers like Pick n Pay, Checkers and Shoprite, and as a micro retailer investors can start their own soft drinks and mineral water business "without having the actual product, but allowing the company to sell it on their behalf".

Judging by the response from FNB, the FSB and Sarb on Fin24 queries, only a court appearance apparently set for early next week could shed some light on SuraPure's activities as well as the future for current investors.

Sensitive information

FNB said it cannot divulge any other information around SuraPure.

“Unfortunately we are unable to provide information on accounts. FNB applies all laws relevant to the operation of accounts held by the bank and complies with such laws,” spokesperson Virginia Magapatona told Fin24.  

The Financial Service Board told Fin24 it had received enquiries about SuraPure, but "its activities fell outside financial services".  "We only have jurisdiction to investigate matters relating to financial services and this matter appears to be a pyramid scheme and hence it was referred to the South African Reserve Bank (Sarb)", said FSB communications co-ordinator Thandolwethu Masango.

The SA Reserve Bank's head for group strategy and communications Hlengani Mathebula said the Sarb "does not comment on or provide any details pertaining to previous, current or potential investigations we may be involved in as part of our mandate”.

Fin24 was responding to a Fin24 user email in which he was seeking investment advice on SuraPure. He wanted to know whether SuraPure was a MLM cloaked pyramid scheme hidden in a product. "It promises to double your money in 60 days... it seems proverbially too good to be true. They are a cooldrink company, you can buy stock or they can sell it for you.”

MLM or Multi-level marketing is a strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit.

A 120% return on investment

According to the SuraPure offer, investors can make up to 120% return on investment in 60 days. The offer is listed as follows:

Buy and resell bottles of 100% juice and still water, minimum bottles to buy are 75 for R300 and each bottle earn your 0.08c for 60 days. After 60 days you also get back your capital (initial deposit). Examples:

1. Deposit R300.00 get R6 per day or R360 after 60 days + R300 =R660.00
2. Deposit R1000 get R20 per day or R1200 after 60 days + R1000 = R2200
3. Deposit R2000 get R40 per day or R2400 after 60 days + R2000 = R4400
4. Deposit R5000 get R100 per day or R6000 after 60 days + R5000 = R11 000
5. Deposit R10 000 get R200 per day or R12 000 after 60 days + R10 000 = R22 000

Investment risk analyst Daryl Ducasse said he does not know too much about the company, "although I heard sometime last year that its growth and method of getting product to customers was a threat to some of the corporates used to having a monopoly in the lower LSM markets".

He said he is not familiar with SuraPure's method of attracting sales people, "but any scheme that ‘promises’ to double ones money in 60 days must either be brilliant or a scam – there’s no in-between. Therefore, prepare for risk if investing in such an entity is on your mind."

Words of advice

A user cautioned potential investors to stay away from "a scam in which the gullible public is enticed with the promise of very high returns in a very short time, but is based on paying off the early 'investors' from the cash from (hopefully ever increasing number of) new 'investors'."

He warned that the "whole structure collapses when the cash outflow exceeds the cash inflow... the originators of the scheme, however, usually disappear with large sums a few days before the crash."

Meanwhile, SuraPure told members in an email sent on Wednesday that its legal team instituted an urgent interdict against FNB and will appear in court on April 8.

In the email seen by Fin24 it said that an attempt to appear in court sooner was delayed because FNB's legal team requested a postponement.

Schindlers Attorneys, Notaries & Conveyancers confirmed that it was representing SuraPure, however, it could not divulge any details.

"As the matter is ongoing, we cannot provide ... any further feedback at this point in time."

The offer on the SuraPure website is no longer available. Instead it says "We are in the process of restructuring our business opportunities. We do not accept any new registration. We will update this page when our lawyers are done restructuring the business."

Meanwhile, anxious SuraPure investors have taken to the internet to find answers.

On HelloPeter one member wrote that pay outs were fine until March 24. He said that thousands of people are losing big money and are in a state of panic.

Seeking answers

On Facebook members lamented the closing of the FNB account and demanded answers from SuraPure.

"Is it possible that we can loose (sic) our money?" one member asked. Another said it's easy to give the same info for a couple of days now... "Wen cn we get our withdrawals pls? (sic)?"

Yet another stated: "I hate to think abt it but i dont think it will be resolved. (sic)"

But not all were pessimistic. The owner of Mongatane Consortium Johannes Mongatane, who does business with Sura Pure, dismissed any wrong doing by the company.  "SuraPure Drinks has done nothing wrong", he told Fin24.

He praised the company for its business model. "SuraPure Drinks has taken the initiative to change people's lives with their investment initiative".

One member asked for patience: "... let the Sura resolve this matter, I understand we all need money but lets give them a chance cuz this is not a simple matter. they will come back to us when they done. (sic)"

Some resorted to prayer: "We pray all goes well. It's unfortunate we have quite a number of doubters with us in this bus."

 - Fin24
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