Kempton Park ponzi scheme: Financial watchdog hits 'advisor' with R143m fine

• The FSCA says it has finalised its probe into an investment company in Kempton Park and levied an administrative penalty of R143 million.
• The state says Jacobus Geldenhuis founded and ran an investment company despite being not authorised to sell financial services.
• During the investigation, it was established that Geldenhuis did not invest client funds in shares but was running a Ponzi scheme, the watchdog says.
  
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The Financial Sector Conduct Authority (FSCA) said on Monday it has imposed a R143 million penalty and disbarred financial advisor Jacobus Geldenhuis for 20 years for allegedly running a Ponzi scheme.

The FSCA said in a statement it had finalised its investment into Classic Financial Services, which followed a complaint that Geldenhuis was offering to invest in shares on behalf of clients.

Neither Classic nor Geldenhuis were authorised to do this, and during the investigation, it was established that he did not invest client funds in shares but "was running a Ponzi-scheme and used client funds for his own benefit."

Further, the FSCA has brought this matter to the attention of the criminal authorities. Investors of Classic Financial Services are encouraged to contact the South African Police Service (SAPS) as well as the liquidators of Classic Financial Services, the statement read.

The state has said previously that Geldenhuis allegedly solicited almost R500 million in investments despite his company not having an operating licence. 

According to the Financial Sector Conduct Authority, Geldenhuis was disbarred from selling financial services or acting as an advisor back in 2009 for dishonesty. The financial watchdog has said this disbarment was never lifted. 

READ| Missing: R475m invested in Kempton Park disbarred financial advisor's 'investment' scheme 

Between early 2019 and August 2022, about R495 million is said to have flowed through bank accounts linked to Geldenhuis and his company. 

With reporting from Jan Cronje