Kenya seems to be the home of ponzi schemes, as tens of firms invade the country, mint billions from unsuspecting investors and then disappear.
The latest to run away from the Kenyan market with billions from investors is Abdalla Mohamed Ali, the CEO of Maalin Group of Companies.
Mr Ali is said to have left the country with over Ksh15 billion, after promising investors huge returns on their investment.
The company with Russian roots is said to have been regulated by the Capital Markets Authority (CMA).
Business Times learns that there is a new online forex trading company called Mansa X that is promising investors huge returns of 24% per annum and claiming to be investing in offshore currencies and commodities.
At a time when currencies, commodities and stock markets all over the world are experiencing losses, with the Nikkei of Japan down 5%, Dow Jones of US down 13% and the FTSE of Europe down 19%, it remains a mystery how Mansa X is going to deliver 24% per annum to investors investing in offshore markets that are losing money.
Asked to give details of what stocks or currencies they bought and sold to register 24 percent, a client was not able to get details of the actual assets that support the promised return.
The fund has all the elements of a ponzi scheme; first Mansa X lacks the underlying assets that can pay the outlandish 24 percent p.a return being promised to investors. They have not been able to share a list of assets where the money is invested.
The scheme has the appearance of legitimacy as it bills itself as “Kenya’s first and only CMA regulated Online Forex Trading Money Manager” so that investors don’t question it.
Maalin Group billed itself as an Online Forex trading company, but disappeared with Ksh15 billion and CMA did nothing to help investors recover anything. CMA has not moved to stop this obvious ponzi scheme that will lead to losses by greedy Kenyans who do not even do the basic due diligence of asking where their money is invested.
At the bottom of their website page, Mansa X seems to give a hint of what awaits investors; that investors could lose their money, but terms it as a disclosure.
“Investing in the foreign exchange market, alternative investments, and other leveraged asset classes carry a high level of risk, and may not be suitable for all types of investors. Before deciding to invest in any type of high leverage trading, you should carefully consider your investment objectives, length of investment and risk appetite. The possibility exists that you could sustain a loss of some of your initial investment and past performance is never indicative of future results. Terms and conditions apply,” the firm operated by Standard Investment Bank (SIB) says, hence on one hand they say they have guaranteed a return but on the other hand they saying you can lose your money.
In their fact sheet, the company says the minimum one can invest is Ksh250,000, plus a management fees of 10 percent and 10 percent above the hurdle rate, in this case 24 percent.
A hurdle rate is the minimum rate of return on a project or investment required by a manager or investor.
Mansa X says that it has Ksh2.2 billion assets under management since it was started in January 2019.
In the Maalin Group case, one of the investors identified as Sheikh Abdulla Kulow told People Daily that he invested Ksh200 million in the trade after selling three houses in Nairobi’s South C estate.
“This is a huge blow to me and my family because this is what I have been depending on for the last years after I sold my apartments to invest in the scheme. The Government must make sure he is brought back to the country and return our money,” Kulow said.
Maalin had reportedly registered at least 600 members mostly from Dubai, Saudi Arabia, the US, Kenya, and Somalia. To join, investors were required to deposit at least Ksh2 million.
The company had operated in the country for over 8 years.
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