ALLEGATIONS

www.afristratpumpanddump.co.za

AFRISTRAT INVESTMENT HOLDINGS FORMERLY KNOWN AS ECSPONENT LIMITED- PONZI PUMP AND DUMP SCHEME

The company together with the board in its entirety conducted the business with reckless misstatements, inducements, fraudulent crime purposively with malice aforethought. The choices and decisions made by the company was reckless with gross negligence as to the consequences of their actions. The perpetrators intention foresaw years ago that the possibility that the Preference Share Program would collapse, but they nevertheless proceeded with their conduct to raise capital from investors in appreciation of that possibility that they would never be in a position to redeem any capital to unsuspecting investors.

Hereinafter “Clients” will be referred to as “Investors” as the company has been unable to make a clear distinguished, ambiguous statement and interpretation as to who these natural people represent.

Hereinafter “Ecsponent Limited or Afristrat Investment Holdings will be referred to as “The Company/” this will include the board of Directors in its entirety:

Hereinafter for the purpose of this document, the wronged parties are the “Preference Shareholders” and such does not exclude “Note Program Holders”, Hybrid Shareholders” and or “Bond Holders”. Specific mention is made to the preference shareholders.

“Ecsponent Limited or Afristrat Investment Holdings” The company Limited Registration Number 1998/013215/06, a public company duly registered and incorporated under the laws of South Africa and listed on the on the JSE having its registered address at Acacia House, Green Hill Village Office Park, Car of Nontaboo and Bootstrapper Street, The Willows, Pretoria East; and its subsidiaries from time to time

“Afristrat Investment Holdings” or the “Company”: The company Afristrat Investment Holdings Limited (formerly Ecsponent Limited), a public company duly registered and incorporated under the Laws of South Africa, with registration number 1998/013215/06, the issuer and listing company of the Ordinary Shares, of which are listed on the Exchange; Hybrid and Preference Shares, including the Notes Program that are not listed on the Exchange -the company and its subsidiaries from time to time.

Criminal Law is defined as follows:” A person who commits an unlawful act is criminally liable for all the consequences that follow, irrespective of whether they are foreseen, foreseeable or intended.There should be some standard that guards against creating the impression that there are two streams of justice; one for the rich and one for the poor, the company having deep pockets with investors having lost hard-earned life savings.

• Irregularities’ – accounting policies, balance sheets and integrated report misstatements

• Mismanagement includes the acquisitions, disposals of companies and shares held directly or linked directly to and between the company and George Manyere-

• Pattern Of Racketeering Activity – the continuous or repeated participation or involvement in any offence referred to in Schedule 1

• Induce or Inducement- includes to persuade, encourage, coerce, intimidate or threaten or cause a person.

• Unlawful Activity means conduct which constitutes a crime or which contravenes any law or Act

The allegations against the company is that of corruption, fraud, fraudulent misrepresentation, or intentional misrepresentation, based on an allegations and contravention of Section 1(1)(a) reads.—(1) For purposes of this Act a person is regarded as having knowledge of a fact if—(a) that person has actual knowledge of the fact; read with Sections 1, 2, of the Prevention and Combating of Corrupt Activities Act 12 of 2004, together with Section 3 of the Corruption Act 94 of 1992, corruption based on: Section 3(b)(ii)(aa) and/or 3(b)(ii)(bb) and/or 3(b)(ii)(cc) and/or 3(b)(iv)

Prevention of Organised Crime Act 121 of 1998 together with Corruption Act 94 of 1992

The Prevention and Combatting of Corrupt Activities Act 12 of 2004 (PRECCA), the Financial Intelligence Centre Act 38 of 2011 (FICA) and the Prevention of Organised Crime Act 121 of 1998 (POCA) are the primary statutes that form part of the matrix of statute dealing with white-collar crime in South Africa.

“Ponzi or Pyramid Schemes” – Both scams are orchestrated by unscrupulous perpetrators, both scams have similar characteristics based around the same concept. Both are self-sustaining as long as cash outflows can be matched by the monetary inflows.

The essential difference between the two frauds is that a Ponzi Scheme generally only requires investment in something from its victims, with promised returns at a later date. A pyramid Scheme, unlike Ponzi Schemes, usually offer a victim the opportunity to make money by recruiting more people into the scam.

Pyramid schemes may constitute both a fraud and a theft. In addition, it is a contravention of Sections 11(1) and 11(2) of the Banks Act, which constitutes an offence thereunder Although the common law crimes of fraud and/or theft still apply, the Consumer Protection Act also prohibits (amongst many other things) the initiation, sponsoring, promotion or participation in “fraudulent schemes and offers”, including pyramid schemes.

“Agent” means any authorised representative who acts on behalf of his or her principal and includes a director, officer, employee or other person authorised to act on behalf of his or her principal, and

(a) any promise, purchase, sale, barter, loan, charge, mortgage, lien, pledge, caveat, transfer, delivery, assignment, subrogation, transmission, gift, donation, trust, settlement, deposit, withdrawal, transfer between accounts or extension of credit; “Foreign Public Official” means—

(a) any person holding a legislative, administrative or judicial office of a foreign state;

(b) any person performing public functions for a foreign state, including any person employed by a board, commission, corporation or other body or authority that performs a function on behalf of the foreign state; or

“Foreign State” means any country other than South Africa, and includes—

(b) all levels and subdivisions of government of any such country or territory; or

“Induce” includes to persuade, encourage, coerce, intimidate or threaten or cause a person, and

“Listed Company” means a company, the equity share capital of which is listed on a stock exchange as defined in section 1 of the Stock Exchanges Control Act, 1985 (Act No. 1 of 1985);

“Official” means any director, functionary, officer or agent serving in any capacity whatsoever in a public body, private organisation, corporate body, political party, institution or other employment, whether under a contract of service or otherwise, and whether in an executive capacity or not;

(a) natural person or group of two or more natural persons who carries on a business;

(b) syndicate, agency, trust, partnership, fund, association, organisation or institution;

“Property” means money or any other movable, immovable, corporeal or incorporeal thing, whether situated in the Republic or elsewhere and includes any rights, privileges, claims, securities and any interest therein and all proceeds thereof;

(a) creating, transferring, surrendering or releasing any right to, in or over property;

(c) evidencing the creation, transfer, surrender or release of any such right, the payment of money or delivery of any property or the satisfaction of any obligation.

(1) For purposes of this Act a person is regarded as having knowledge of a fact if—

(i) the person believes that there is a reasonable possibility of the existence of that fact; and

(ii) the person has failed to obtain information to confirm the existence of that fact, and

“Knowing” shall be construed accordingly. Furthermore, the Act defines what is meant by a person “knowing” of such prohibited conduct. “Knowing” when used with respect to a person, and in relation to a particular matter, means that the person either had actual knowledge, or such person reasonably ought to have had actual knowledge or acquired it by having investigated the matter or by having taken other measures which would reasonably be expected to have provided the person with actual knowledge of the matter. The knowledge possessed by the company at the time of the act that his conduct would lead to a consequence which the legislature desired to prevent, is by a construction of the law regarded as intention to bring about this consequence. ‘Knowledge' in this context does not necessarily mean 'full and certain' knowledge that this consequence is inevitable but on the other hand it must be knowledge which reached a high degree of probability.

(2) For the purposes of this Act a person ought reasonably to have known or suspected a fact if the conclusions that he or she ought to have reached are those which would have been reached by a reasonably diligent and vigilant person having both—

(a) the general knowledge, skill, training and experience that may reasonably be expected of a person in his or her position; and

(b) the general knowledge, skill, training and experience that he or she in fact has.

(3) (a) A reference in this Act to accept or agree or offer to accept any gratification, includes to—

(iii) offer to demand, ask for, seek, request, solicit, receive or obtain, any gratification.

(b) A reference in this Act to give or agree or offer to give any gratification, includes to—

'Pattern Of Racketeering Activity' means the planned, ongoing, continuous or repeated participation or involvement in any offence referred to in Schedule 1 and includes at least two offences referred to in Schedule 1, of which one of the offences occurred after the commencement of this Act and the last offence occurred within 10 years (excluding any period of imprisonment) after the commission of such prior offence referred to in Schedule

“Unlawful Activity” means conduct which constitutes a crime or which contravenes any law whether such conduct occurred before or after the commencement of this Act and whether such conduct occurred in the Republic or elsewhere.

Section 3 of the Corruption Act 94 of 1992, General offence of corruption. —

(a) accepts or agrees or offers to accept any gratification from any other person, whether for the benefit of himself or herself or for the benefit of another person; or in order to act, personally or by influencing another person so to act, in a manner—

(bb) misuse or selling of information or material acquired in the course of the, exercise, carrying out or performance of any powers, duties or functions arising out of a constitutional, statutory, contractual or any other legal obligation;

(iv) that amounts to any other unauthorised or improper inducement to do or not to do anything,

Listed a catalogue of corruption, fraud, fraudulent misrepresentation, or intentional misrepresentation committed under the disguise of the company

***All allegations will be included with Sections 1, 2, of the Prevention and Combating of Corrupt Activities Act 12 of 2004, together with Section 3 of the Corruption Act 94 of 1992, ***

Allegation 1 – “Utterance of Forged Documents” Forgery (also known as "uttering a false instrument") involves the making, altering, use, or possession of a false writing in order to commit a fraud. Deleting, adding, or changing significant portions of documents may also be "material" alterations if these changes affect the legal rights or obligations represented in the documents. Additionally, as discussed above, using or possessing false writings also constitutes forgery, known as "uttering a forged instrument."

Case lodged with the South African Police Services dated August 2021 155/08/2021, wherein as Webber Wentzel were compliant in insuring that these falsified documents formed part of the defence documents handed into the High Court of Pretoria case number 23153/20.

Section 3. General offence of corruption (a)(i) / 3(aa) / 3(bb)(ii)/ 3 (cc)(iii) and Section 3 (cc)(iv) -

In respect of the allegations against the directors of the company, in essence, are that they, through their attorneys namely: Eversheds Sutherland Law Firm based in Johannesburg and Webber Wentzel a Legal Firm based in Santon, Johannesburg- Handed in to the High Court of South Africa (Gauteng Division, Pretoria) documents altered to benefit their defence, not to the benefit of the company in a Civil Matter Case Number 23153/20: - Combined Summons.

Allegation Pyramid Scheme/ Ponzi Scheme - Constitute both a fraud and a theft. In addition, it is a contravention of Sections 11(1) and 11(2) of the Banks Act, which constitutes an offence there under the Companies Act.

Although the common law crimes of fraud and/or theft still apply. In the South African context fraud is defined as: “The unlawful and intentional making of a misrepresentation which causes actual prejudice, or which is potentially prejudicial to another.”

Section 3. General offence of corruption (a)(i) / 3(aa) / 3(bb)(ii)/ 3 (cc)(iii) and Section 3 (cc)(iv) -

The allegations against the directors of the company and the entities and or companies effectively controlled by them, procured large amounts of capital from investors for investment by fraudulently representing that they would safeguard those amounts and obtain favourable returns, when, in fact, the money was thereafter invested recklessly or misappropriated for the benefit of George Manyere, his associates and/or corporate entities in which he held an interest in.

INDUCEMENT TO THE INVESTMENT AND OR PRODUCT

Classification of Redeemable Preference Shares, holders of the Preference Shares receive a cumulative dividend, subject to the terms of the Preference Share Class issued. The Preference Shares do not have the right to participate in any additional dividends declared to Ordinary Shareholders. These shares do not have Voting Rights at general things of the Company.

Preference Shares, are mandatorily redeemable on a specific date… The Preference Shares are Redeemable after 60 months from the initial issue date and as a result are classified as debt and disclosed as such in the statement of financial position. Preference Shares, which are mandatorily redeemable on a specific date, are classified as liabilities

NOTICE SENT OUT TO INVESTORS: Preference Shares: How Secure is your capital….” Market Liquidity and the willing buyer/willing seller mechanism of trading listed shares is still an option for the company clients as all shares are listed on the JSE, but in reality, who would want to risk trading when your capital is 100% secured. Further the statement of 100% secured was an inducement to get investors to invest. May 2016 Newsletter – “After five years, the company automatically buys back the preference shares at the agreed amount of capital and return, which is confirmed in the Applicable Pricing Supplement (APS) presented to investors”. - The front page of this document describes the type of shares, the backside of the document is listed as the – Ecsponent – Program Memorandum, which should be read in conjunction. (Page 1 and 2).

OTHER PLATFORMS OF INDUCEMENT The same investor’s’ who were indoctrinated and induced to invest by adverts on Television and YouTube, newsletters and false promises of old age security.

In the disguise of offering a safe haven for the capital invested and as not to raise any red flags, the company offered reasonable interest rates, a 11.5% over 5 years rates were competitive with the added bonus of withholding tax. Investors did not have to do calculations and pay over the taxes monthly on dividends.

The directors conducted the business of recklessly and in contravention of Sections 22(1) of the Companies Act, 2008 that clearly defines that a company must not carry on its business recklessly, with gross negligence, with the intent to defraud any person or for any fraudulent purpose. Read together with Section 76(3) when a director exercises his/her power, he/she must do so in good faith, in the best interests of the company and with the degree of care, skill and diligence that may be reasonably expected of a person carrying out the same functions in relation to as carried out by that director, and having the general knowledge, skill and experience of that director.

Read with Section 162(5)(c)(iv) The director’s had, inter alia, allowed to continue business in parlous and insolvent circumstances and extracted company money in order to pay for business acquired directly through the major shareholder, with misstatements to investors and to continue selling the ‘Preference Shares”, knowing that being a public company, which required proper accounting systems and was destressed, strong on debt liability, having catastrophic, devastating financial implications to investors.

For the purpose of this statement, clear examples of “Reckless Trading” are defined as concealing or disguising the nature, source, location, disposition or movement of the said property or the ownership thereof or any interest which anyone may have in respect thereof.

Allegations of Misstatements- Company Related Acquisitions” The following acquisitions/investments and disposals were concluded during the financial period 2018 Financials:

In these acquisitions the board fraudulently represented to its shareholders that was able to pay, redeem preference shares to investors, continued to sell more shares to the benefit of the directors/ public officers and shadow director. Investments, assets within the company are diversified across a number of industries, predominantly financial services and technology. High-growth opportunities are identified and negotiated by industry specialists with significant experience in these industries. Shareholder value is currently improved by the expansion of the Group through the growth in the underlying assets and operational trading.

Borrowing powers financials of 2018 in terms of the Memorandum of Incorporation of, the directors may exercise all the powers of to borrow money, as they consider appropriate, subject to the delegation of authority approved by the Board. The Board has passed a resolution to limit the Group borrowings to R500 million, excluding the liabilities related to the R5bn preference share programme, and provided the shareholders with written notice thereof.

Signing financial statements that were false or misleading in a material respect, or issuing a prospectus that contained an untrue statement. The directors Been a party to an act or omission by despite knowing that the intention was calculated to defraud a creditor, employee or shareholder of, or had another fraudulent purpose

Section 162(5)(c)(iv) The director’s had, inter alia, allowed the company to continue business in parlous and insolvent circumstances and extracted company money in order to pay for business acquired directly through the major shareholder, with misstatements to investors and to continue selling the ‘Preference Shares”, knowing that being a public company, which required proper accounting systems and was destressed, strong on debt liability to investors.

With these foretold statements, they continued “Reckless Trading” by selling additional Preference shares up and until the 04th of February 2020. Months after they knew that they were going to convert debt into equity.

Combating of Corruption Activities Act, No. 12 of 2004, and lastly, a contravention of section 4(a) or 4(b) of the Prevention of Organised Crime Act, No. 121 of 1998.

Investors are adamant that the company was constrained to comply with the terms of any investment mandate and to report to clients on investments placed with it. Here noted that Section 19 of the FAIS Act stipulates that the monies received from clients for investment purposes have to bear the character of trust funds as per September 2015 Newsletter “The company’s products are unique because their key features are similar to unit trust investments and endowment products. They offer liquidity (willing buyer willing seller) like unit trusts and an after-tax income plan as with endowment products”

Investors allege that the company together with key individuals within that corporate structure did not act with honesty and integrity as required, although it is conceded that investors cannot say that every cent of investor funds was misappropriated, the record keeping is and has been very creative.

Considering the allegations that appear herein, on the face of it, they are extremely serious allegations which should carry heavy penalties together with the same high degree of moral blameworthiness. At the end of the day, society demands that fair justice.

The fast-evolving nature of modern society with ever-new complex crimes, especially those transpiring through “white-collar”, it is important to evaluate the applicable requirements of dolus eventualis as to various types of “white-collar” crimes

South African courts are of the view that callous criminals who act together to commit a crime ought to have foreseen the consequences in achieving their goal

In principle it should not matter in respect of dolus eventualis whether the agent foresees (subjectively) the possibility as strong or faint, as probable or improbable provided his state of mind in regard to that possibility is “consenting”, “reconciling” or “taking [the foreseen possibility] into the bargain”. However, the likelihood in the eyes of the agent of the possibility eventuating must obviously have a bearing on the question whether he did consent to that possibility