The Financial Services Ombud, Noluntu Bam has warned that professionals, including auditors, lawyers and property valuators, who endorse, promote or sell high-risk investments do so at their peril.

The Financial Services Ombud has warned that professionals, including auditors, lawyers and property valuators, who endorse, promote or sell high-risk investments do so at their peril.

She issued this warning as part of her latest determination in favour of investors who lost savings in a collapsed BlueZone property syndication. In her determination, Bam called for:

- The conduct of property valuators and accountants in the failed syndication to be investigated;

- The action of BlueZone’s attorneys, Honey & Partners to be referred to the Law Society and the National Prosecuting Authority. It is the second time that the Ombud’s office has referred a firm of attorneys to the Law Society.

In her determination, Bam singled out Honey & Partners saying that it was a “vital cog” in the BlueZone investment scheme. She says that as the conveyancing attorneys for the Blue Dot syndication (a BlueZone development), the firm knew about the false valuations designed to swindle investors.

Bam found that Honey & Partners was supposed to return money it held in its trust account to investors if the target of R425-million was not reached. Bam found that only R361-million was raised and because of this investors may have a claim against Honey & Partners and the Attorneys’ Fidelity Fund.

In her determination in a complaint brought against Cape Town financial intermediary, John Moore and his company Johnsure Investments who sold the BlueZone and Sharemax property syndications,

 Bam has recommended that Moore also be referred to the National Prosecuting Authority, the Law Society and the Attorneys’ Fidelity Fund.

The latest property syndication determination arose after GWB, a pensioner from Diep River complained that John Alexander Moore of Johnsure Investment advised him to invest R100k in BlueZone’s failed Spitskop Village syndication in Mpumalanga and advised GWB’s wife to invest R250k in Sharemax.

Bam, in her determination, referred to a fraudulent deal in which Blue Dot Properties bought the Spitskop syndication land for R1 057 000 and then sold it to Spitskop Village Properties for R118-million. At the time the property was unused agricultural land.

Bam also ordered Moore to repay GWB the R100k plus interest of 15,5% a year from 2007 until the date of payment.

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It’s good to hear that something is done to take on these property syndicates. I believe that I’m also a victim, my property was sold on ‘auction’ on 22 February 2011. I was renting it out through an agency and when the summons were delivered the tenant faxed them to the agency, they (agency) kept quiet about the summons. They only told me after the house was sold. Strange thing is the same tenant is staying in the house, his company still paying the rent to the agency. My guess is they decided to buy the house themselves, little did they know that I’m on debt review and a misunderstanding happened. If they forwarded me my summons the house wouldn’t have been sold. The matter is still under investigation and I hope that justice will be served because no one saw the house being auctioned, not my neighbors and not even the tenant himself, the last time he saw an official it was the property valuator. - Kutazwa