Business

CBL warns about unregistered investments company

Bereng Mpaki

THE Central Bank of Lesotho (CBL) has warned the public against investing money into EASE, a company that is allegedly passing itself as a stock exchange.

The CBL is currently developing the Maseru Securities Market (MSM) as a platform to facilitate a centralised trading of financial securities in a secure environment that enhances confidence to investors. MSM was established by law in 2014 through the Capital Markets Regulations of 2014.

However, since its official launch in 2016, the MSM has struggled to get off the ground and has not listed any company yet.

The MSM is part of wider financial reforms to improve the sector and to encourage the wider share ownership of previously privatised and the majority of the corporate sector to facilitate the raising of medium to long-term capital.

The MSM was registered in line with international practice, a philosophy of self-regulation by the markets.

And in a recent statement, the CBL warned the public against investing their money into EASE, a company which “pretends to be in the process of registering a stock exchange”.

The CBL says the company is not licensed institution and therefore is not allowed to receive deposits from the public.

“The CBL, as the Commissioner of financial institutions, has become aware that there is a company by the name of EASE which invites members of the public to buy its shares on the pretext that it is in the process of registering a stock exchange with the CBL,” the central bank’s statement reads.

“Members of the public are advised to desist from engaging in any business with the said company as it is not a licensed institution and, therefore, is not allowed to receive deposits from the public.

“The CBL is engaged with law enforcement agencies regarding the activities of the said company. Members of the public are earnestly advised to be careful with their hard-earned money and enter into agreements that involve money only with licensed financial institutions.”

The CB has in the past made similar warnings to the public, but some have disregarded them and have subsequently become prone to losing their funds to illegal and unregulated investment schemes that have popped up in the country as well as over the internet.

The public lost an estimated M400 million to an alleged pyramid scheme called MKM that collapsed in 2007. In 2016, more people lost undisclosed amounts of investments made into MMM Global, another pyramid scheme that operated over the internet.

In 2018, more people lost money after investing in different local forex trading platforms among them Hlazvill Forex Trading. This was despite the CBL having warned the public of the illegal operation of these entities.

 

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