This is the view of Chris Walker, the mastermind behind the R800m Defencex scheme.
Walker made this statement during an exclusive interview with Moneyweb, which ranged from the new
schemes and training seminars he is promoting to his views on Defencex.
Defencex is the latest scheme to hit the headlines, after the Western Cape High Court on February 28 ordered its
Standard Bank account to be frozen because of the company's deposittaking activities.
In terms of the Banks Act, only banks, collective investment schemes and brokers through a brokerage account are
authorised to take deposits.
Moneyweb earlier reported that the Reserve Bank had asked auditors PwC to investigate whether Defencex,
Cycle4Dollars, Net Income Solutions and Walker were contravening the Banks Act.
According to affidavits, large sums of money were deposited into the accounts of Net Income Solutions, none of which
were reinvested by Walker.
Still no returns on invested amounts
Defencex punted itself as an online investment company that allows you to 'grow your profits by learning to
compound your daily profits'.
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It promised investors about 2% per day on investments of five months' duration, subject to a complicated points
based assessment system. They could enhance these returns by earning commission on the amounts invested by
people they in turn introduced to the scheme.
Investors have no clue when they will see any of their money.
The last post on June 25 on the Defencex website stated: 'The interim order made on 28 February 2013 was made
final and confirmed today. In other words the Registrar of Banks still has control over the money. So nothing has
changed.
'We still have to wait until the investigation is finalised. We do not know when that will be.'
Analysts said the signs were clear for investors not to buy into a scheme like Defencex. 'Every time a scheme is
exposed, people go through something similar to the normal five phases of loss disbelief, anger, fear, negotiation,
and then a very distant acceptance or resigning themselves to the loss,' said Daryl Ducasse, investor activist and
member of Merkurius Capital Solutions.
Answering questions on the loss people suffered from investing in Defencex, Walker told Moneyweb: 'The only
reason they have lost money is because the Reserve Bank closed the bank accounts . . . Sarb did not like people to
be able to make money because they rely on debt. . . the banks make money from debt.
'They think I am the biggest criminal in SA at the moment,' said Walker.
He likened the insurance industry and the banks to Ponzi schemes, while admitting that his battles with the Reserve
Bank could never have been won.
He also claimed not to have profited from his embattled business and suggested that the accounts linked to Net
Income Solutions were frozen to protect the profitseeking interests of the banks, and to allow liquidators and
attorneys a slice of the R349m pie.
Pyramid scheme accusations
According to Moneyweb, Walker, 46, is no stranger to controversy. His previous scheme, Gold Charity Fund
Investments, was reportedly declared an unfair business practice back in 2002.
Walker was accused of operating a pyramid scheme which abused the name and image of former president Nelson
Mandela.
Walker went on to say: 'I'm still with the people who made money and [they] understand.
'The Reserve Bank closed the banks accounts . . . they must decide what to do with the money.
'I'm not going to win against Sarb that is impossible.'
Referring to Defencex, he said: 'The company was about revenue sharing . . . traditional network marketing pays out
up to ten levels, they don't advertise so they take the advertising budget and they give it to the members . . .'
Ducasse said he doubted whether Defencex members will ever see their money again."
[94] Fin24 7 is headlined "Defencex boss opens up to Moneyweb". It is an article that is based on Moneyweb's
wideranging interview with Mr Walker. However, the article is focused only on one of the issues covered in
the interview, Mr Walker's views on Defencex. On this issue, Fin24 copied certain extracts almost wordfor
word from Moneyweb 7.
[95] Fin24 did not reproduce the bulk of Moneyweb 7. It left alone all the other issues covered in the interview and
focused only on Defencex.
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Even its coverage of Defencex was selective. Much of the discussion was left out. Quantitatively, its
reproduction was not substantial.
[96] Is the position different when viewed qualitatively? In my view, not. Moneyweb contends that ". . . Fin24 has
copied verbatim the heart and conclusion of the Moneyweb article . . .". That appears to be an exaggeration.