IT began with a select presentation at the Wanderers in Johannesburg. Just 20-30 people brought together by recommendation, they met entrepreneur Cecil Uren and watched his slick presentation on how to get rich quick via a fail-safe property investment.
But for many in Uren’s audience, that night has ended in bitter tears and court cases. Lured by the thought of making virtually instant money, they bought property in a coastal development area whose breathtaking views they saw for themselves in his marketing video.
Then everything crumbled. Saddled with bonds they could not pay, they were eventually sued by the banks from which they had borrowed money. Though they put up desperate legal defences the end was inevitable.
Last month three of the people taken for a ride by Uren found themselves in the high court, Pietermaritzburg. They were indebted to Absa and because they were not making repayments the bank wanted judgment against them and an order declaring their property executable.
Now the court has dismissed their last-ditch fight. John Manyike, along with Ntokobane Mogotsi and his wife Cindy, all of them with post-graduate qualifications, claimed they were victims of reckless lending by the bank and should be protected by the National Credit Act. But Judge Yvonne Mbatha ruled the three of them effectively formed a partnership to buy the land and were thus not covered by that act.
On the strength of Uren’s presentation the three bought a property from him for R1.35m. He said he would ensure the property was rezoned, subdivided and sold on for development within six months. During that time they would not even have to make repayments on the property as he would deposit R100,000 into their account for this purpose. But the rezoning and subdivision did not happen, and when they discovered that the land was worth no more than R300,000, Uren was nowhere to be found.
Mbatha said it was difficult to understand how the three, "armed only with their creditworthiness, expected to buy expensive properties and dispose of them at a huge profit within a period of six months. They should have realised this was only a scam."
Even more breathtaking than the ultimately nonexistent views, however, is the fact that they did not go to see the property before buying it. As the judge pointed out, the property might not even have existed.
And it turns out they are not alone. In March this year, Judge Kathy Satchwell had to consider the plight of another of Uren’s victims, Malecia Kganakga. She, too, was in the audience that night at the Wanderers. Kganakga bought land from Uren for R900,000: it was worth less than half what she paid and could not be subdivided.
Satchwell heard evidence in support of Kganakga’s sad story from yet another person fooled by Uren, who claimed there were even more.
Banks not responsible
The judge said she accepted that they felt they were victims of misrepresentations, "diddled out of hard-earned money".
Yet, though Kganakga is a well-educated professional holding a PhD, like the others she did not visit the ironically named "Elysium" property and accepted everything Uren said as true.
She understood Kganakga’s distress but could not help her, said the judge. The misrepresentations were made in respect of the sale agreement with Uren rather than in the application to the bank for credit and the bank was not obliged to check what clients wanted to do with their money and advise them. If they had borrowed money to buy shares whose value then plummeted, the banks could not be held responsible.
The two cases left me puzzled: who would have thought it necessary to tell well-educated people that there are baddies in the world, after their money? And that it is not only highly placed government connections who dabble in fraud and corruption?