Contract

CONTRACT

www.afristratpumpanddump.co.za

The difference between greed and ambition is a greedy person desires things he isn’t prepared to work for

THE CONTRACT:

There is no final consensus when and how the Broker’s/Representative’s found investors, or how investors found the Brokers in many cases it was a matter of re-investments, Media and the aggressive marketing strategy of Ecsponent Limited.

With all the hype created it was not difficult for Brokers to sell the product, he/she is well trained and proficient, well educated, presentable and extremely outgoing. The last sentence of the “Disclosure” reads… Ecsponent Financial Services (Pty) Ltd is satisfied that the representative is competent to act when rendering a financial service on behalf of Ecsponent Financial Services (Pty) Ltd, taking into consideration the personal character qualities of “Honesty and Integrity, Competence and Operational ability, as defined in the Fit and Proper requirements”

Clause 5 of the “Disclosure” states that the Broker/ Representative holds cover for Professional Indemnity - this means absolutely nothing and is as worthless as the shares sold to investors. Furthermore, once signed you can never go back on what the broker sold you with his/her words as, per clause 2 of the SHARE APPLICATION FORM “The Investor’s signature to this agreement shall be deemed to supersede all previous verbal or written agreements between him/her and Ecsponent or its agent or any of their representatives”

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.”

Ecsponent Limited through its 100% owned Subsidiary presents the potential investor with: Document Check Sheet, no further documents are handed to investors.

Herein lies the actual question of ‘Meeting of Minds”, the intentions of the investor and the company when forming the contract, a common understanding. For better understanding a mutual agreement to all the obligations within the contract associated with acceptance and acknowledgement. In this statement it means that both parties understand and accept the terms, obligations, and rights that come with entering the agreement.

After five years, Ecsponent 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. Number 8 of the Check List.

Taking a look at all the documents supplied, Number 8 is the “Applicable Pricing Supplement” it consists of two pages, 2 pages on the top of page 2, and clearly it states “ECSPONENT LIMITED – PROGRAMME MEMORANDUM”.

Dolus eventualis: Recklessness or legal intention. The perpetrator does not intend to cause the unlawful result, but he subjectively foresees the likelihood that in pursuing his main goal, the unlawful result may occur, but that notwithstanding, reconciles himself to this possibility.

‘A person acts with intention in the form of dolus eventualis if the commission of the unlawful act or the causing of the unlawful result is not his main aim, but:

(a) he subjectively foresees the possibility that, in striving towards his main aim, the unlawful act may be committed or the unlawful result may be caused and

THE CONTRACT – Front Page: Ecsponent Limited – Fully Compliant, regulated by FSB, JSE, CIPC and Sars. Now this is not true the Limited Company was never regulated by the FSB.

Share Application Form – 2 Pages: This document is irrevocably an application for Preference Shares subject to the Memorandum of Incorporation of the Company, the Memorandum and JSE listing requirements – All over this document they mention Memorandum, here they never mention what Memorandum besides the Memorandum of Incorporation. Ecsponent Limited makes the application not Financial Services.

Investment Recordial /Disclosure 2 Pages: This is where Financial Services name is mentioned – however, stating that Escponent Limited has complied with article 100 of the CIPC. In the same document it states that Ecsponent Limited and its products are not regulated by the FSB, but by the JSE and CIPC, SARS has been left out.

Recording here the Questionnaire which an investor has been so kind to share with us states:

QUESTION 8. Ecsponent Limited issues no guarantee on any of its products offered, she ticked yes, that the product is guaranteed.

The same investor under No.14 I also want to highlight the following and bring it under the attention of Ecsponent Limited: “My understanding is that my capital is totally safe and at the end of the term been October 2020 (5years from now 2015) I will not have lost a cent, the amount I now invest will be fully paid to me free from any deductions whatsoever” Here we wish to mention that the word Memorandum is used not “Programme Memorandum” Disclosure 3 Pages: Once again Programme Memorandum is still to be mentioned.

Specific Financial Service Agreement 2 Pages: “The investor should take particular care to consider on his/her own, whether the advice is appropriate considering his/her objectives, financial situation and particular needs” Number 5. Should the investor not accept the advice or implement the recommendations made by the advisor, the investor hereby indemnifies the advisor against any financial loss that the investor or his/her dependants or any third party may suffer as a result. Here the investor inserted “ENTIRELY WITHOUT PREJUDICE” – Another 2 pages down and still no “Programme Memorandum”

Minutes of Clients Meeting: “Client’s knowledge about investment products and instruments” Client states conservative Investment. First time” PROGRAMME MEMORANDUM” is mentioned and no question here just above No.6 -Application Pricing Supplement supplied to client and discussed, APS- Docs in Place, the back side of the APS page “ECSPONENT LIMITED – PROGRAMME MEMORANDUM”.

Applicable Pricing Supplement 2 Pages: Must be read in conjunction with the Programme Memorandum dated the 8th September 2014, prepared by Escponent Limited. Here the specific client crossed out the sections 24 to 29.

Let us now evaluate the “Quotation”: This document has been prepared by Ecsponent Limited. All investments can be redeemed prior to the end of the investment term but only on the JSE. Under the Programme Memorandum dated the 8th September 2014, prepared by Escponent Limited

However: Point 10 of the “Quotation” states: “All investments can be redeemed prior to the end of the end of the investment term but only on the JSE”. Preference Shares are not listed on the JSE, investors would have to dematerialize and do a conversion to Ordinary Shares prior to trading on the JSE,

Further notes to the above document, Programme Memorandum dated 15th day of December 2015 an unsigned copy listed with the JSE, approved by the JSE, for publication. Page 43, Note 1.5 Clearly states: There is no active trading market for the Preference Shares.

Point 12 of the Quotation: “Capital returned to investor after investment period” The company further confirms to investors the following: Preference Shares can only be bought over by the company themselves for the same price paid for them, free from any deduction to the investor. Preference Shares cannot be traded on the JSE, as they can be used as “Collateral”.

Investors verily believe there was no meeting of minds, as the whole contract is ambiguous and not clear as to what documents “governed the investment”.