“Not one of the ‘beneficiaries’ I brought in has ever been paid. Yet, they were all told that they had unclaimed benefits in their name and they were all given a figure as to how much was available.”
The origin of Sean Westcott’s business can be traced back to Eldorado Park in Gauteng.
Similar to the legends of the mythical city of gold which enticed explorers for two centuries to partake in quests for untold riches… Rumours of guaranteed wealth have drawn crowds of people desperately searching for a way out of their financial difficulty to Donafin in Eldorado Park.
According to a client of Donafin, whose identity is known to the Vryheid Herald but cannot be published due to fear of intimidation, the business was started by Leon Lincoln who, in the beginning, worked from the garage of his Eldorado Park home.
“In 2013, the business was called BrownLinc. After a while the name changed to NewMindz and then to Donafin. It is still operating as Donafin in Eldorado Park but from different premises,” said the associate.
“I went there after hearing through word of mouth that they were able to trace unclaimed benefits. A close relative of mine had passed away and I wanted to know if there was a pension fund in her name. The yard was full of people.
“I paid the admin fee and they told me the money would be in my bank account in six months.”
Two years later, this client of Donafin has not received the money that was promised.
“Leon approached a group of clients and recruited them as agents. He said that he was increasing his fee to R1 200 and would pay R200 for each new client introduced to the business. I brought in hundreds of new clients.
One doubtful Eldorado Park client went to the FSCA for confirmation after she was told by Donafin that she had R190 000 in unclaimed benefits in her name.
She has provided the Vryheid Herald with documentary proof from the FSCA that indicates that she does not have a cent in unclaimed benefits to her name.
Residents of Eldorado Park said that Leon Lincoln has shamelessly flaunted his newfound wealth, buying flashy vehicles and investing in his home.
Sean Westcott was introduced to Leon’s Eldorado Park clients in June last year as the ‘paymaster’ from Cape Town who would ensure that all outstanding money would soon be paid out to Donafin’s increasingly disgruntled clients.
It wasn’t long thereafter, that Mr Westcott opened a Donafin branch in Vryheid. In June, two days prior to the Hawks raiding the Vryheid business, Donafin had changed its name to Tovasize, but continued to operate in exactly the same manner as before. Mr Westcott, however, rebuffed any further association to Donafin.
A Vryheid couple has confirmed that Donafin in Vryheid (now Tovasize) operates in exactly the same manner as Donafin in Eldorado Park.
“We heard from friends of ours, that there was this tracing company in town that could track unpaid benefits and surplus funds in your name. I accompanied my husband there and they took his ID number and told us there was R294 000 in his name. We paid the R1 500 admin fee believing that we were going to get R294 000 back, but we still haven’t received any money. What makes us suspicious that this is a scam is the fact that the people before us and the people after us were also told they had unclaimed funds. How can everybody have unclaimed funds in their name?”
Hawks investigators have confirmed that a similar business has also opened in Nongoma, and they are looking into claims that one may be operating in Newcastle.
Anyone with further information is urged to contact Estella Naicker of the Vryheid Herald on 079 256 7570.
Liberty’s admission that 130 pension and provident funds must be reinstated years after industry-wide cancellations of thousands of dormant funds could bolster a case before the Constitutional Court.
Speaking at Liberty’s interim results for the six months to June on Thursday, CEO David Munro said it had erred in deregistering 130 funds with about R100m in assets when it cancelled around 4,600 dormant funds about a decade ago.
This could affect up to 3,000 beneficiaries, said Tiaan Kotze, CEO of Liberty Corporate.
It had successfully reinstated 25 of these through a high court process and had recommenced payments. Liberty would look for ways to reinstate the remaining 105 funds more expeditiously, Munro said.
"There’s a lot of noise around this matter and we want to be clear that we take it very seriously. We are prepared to go back and look at our actions, and where we’ve made mistakes, to rectify them," Munro said.
Liberty, which found that funds needed to be reinstated following its own investigation, is the first retirement fund administrator to admit as much.
"I congratulate Liberty on making these disclosures and wish other fund managers would do the same," Rosemary Hunter, the previous deputy registrar for pension funds at the Financial Sector Conduct Authority, said.
She has argued that the cancellations project, in which the regulator approved the cancellation of nearly 7,000 pension funds from 2007 to 2013 on the grounds that they had ceased to exist because they no longer had properly constituted boards, was illegal.
After two high court rulings and the Supreme Court of Appeal dismissing her case against the regulator, Hunter approached the Constitutional Court. She is seeking an order that all the funds be investigated and is now awaiting judgment.
For Liberty, reinstating these funds represents an administrative expense at a time when the embattled insurer is trying to cut costs as part of a turnaround.
Separately, Liberty disclosed an amount of R2.2bn in unclaimed benefits, saying it was actively locating 75,000 of the 100,000 beneficiaries to whom this money was due.
Whatever resources were required to trace beneficiaries and reinstate wrongly cancelled funds would be made available, Munro said. Liberty had made "meaningful progress" on its turnaround, which involved simplifying its product set and internal structure.
For the six months to June, normalised operating earnings jumped 18% to R958m. While a considerable improvement on the six months to June 2017, this is still behind the R1.1bn posted for the six months to June 2016, signalling it still has some way to go to return to what chairman Jacko Maree has previously described as its "former glory".
It would be critical to better integrate with parent Standard Bank for distribution and customer data, as had been done with the short-term insurance joint venture, said Avior Capital Markets analyst Warwick Bam.
"As long as its core affluent consumer remains moribund and the competitive environment remains unrelenting, Liberty’s pursuit of sustainable growth will be a bit like trying to boil the ocean," said Justin Floor, a portfolio manager at Kagiso Asset Management.