Tag Archives: investment

Is D9, an Investment Fraud or not? Watch out!!!

Posted on July 9, 2017 | 5 comments

Investment Fraud is defined by the Cambridge dictionary as the illegal activity of providing false information to someone so that they will invest in something.

You may or may not have heard of the various schemes promising heaven on earth returns to investors. One of those that has picked my attention in the recent past is D9. Rumored to be registered in Brazil and Hong Kong, it seems to have taken the gullible folks in Uganda by storm. Matters have been worsened by endorsement from men of the robes like Pastor Mark Kigozi of Real Life Church.

In this article, I will not dwell on how D9 works since I have no intention of being their salesman. However, I want to share with you the reader warning signs of an Investment Fraud. I hope by the time you’re done reading, you’ll be in a better position to tell whether D9 is a fraud or not.

Investment frauds are typified by all or some of the following characteristics;

  1. The guarantee of consistently good returns. Business investments are no fairy tale. A business opportunity may offer you wild returns in one year and total losses in another. NO legitimate business in the world will always guarantee you consistently good returns. Even drug dealers make losses occasionally when their consignments are tracked down and confiscated by the authorities.
  2. Unclear investment products or services. If you cannot point a finger at something straight and obvious that generates revenue for the business, just know there is a problem. I recall TelexFree that used to promise people money for simply logging in daily and placing adverts into a web system. The company apparently claimed it made money through the sale of calling cards. Today, the scam founders are facing litigation in the USA as millions bleed as a result of their lost savings.
  3. Unclear company information. A legitimate business usually is very straight up with information pertaining to its history, track record, business operations, tax filings among others. A decent amount of this information tends to be easily accessible on the company website. In the event that you cant readily get such information, step back and think twice.
  4. Pushy sales brokers. Anytime you are confronted by overly aggressive sales brokers who want you to make a decision instantly, let your sixth sense kick in. Why should you not be given an opportunity to go back home, consult or even think through the proposition?
  5. Unexpected phone calls or messages. You might all of a sudden be contacted by a long lost colleague who then urges you to meet up in order to discuss some hot business opportunity. Think twice. I once was sent a message by a young man I had interacted with over 6 months earlier. He insisted that I meet him in a certain office and I duly obliged. Upon reaching, I found a herd of people seated being taken through the motions of how to join a certain pyramid scheme whose name I have forgotten. My stay didn’t last more than ten minutes. Ever since then, I never respond to his calls and messages when he gets in touch.
  6. The promise of high returns in a short period. An investment offer that promises you crazy returns (usually many times above market rates) needs checking. In most cases, compare this offer of returns with the alleged product or service on offer.
  7. Low Risk, No Risk or Guarantee. Once you are presented with an opportunity that has any of these three hallmarks, it helps to open your eyes wider. Like I said earlier, there is NEVER a 100% guarantee in any legitimate business.
  8. The temptation of being part of an exclusive investment organisation. Whenever there is a promise of exclusivity, chances of a fraud scheme being engineered are rife. Even when you may make some money as an early adopter, that will not negate the fact that you are part of a scam whose pack of cards will fall sooner than later.
  9. The investment offer is based overseas. Most scams are usually offered from remote locations. There are countries that are notorious for hosting these scams and Brazil is one of those. They carefully craft their operations to ensure that they evade jurisdictions with serious financial systems to detect fraud. This also allows the founders to eventually walk away scotfree when the pack of cards crumbles (notice I used the term when and not if).
  10. They approach you in form of seminars and sales people representing schemes. Have you been called for a seminar or presentation in a hotel or large office of sorts? Have you been flooded by a team of marketers who promise you only the very best if you part with your hard earned or sometimes borrowed money? Offering guarantees? Insisting that you sign up before the seminar ends? Well …..
  11. They prey on your membership of a certain group. Winning trust is one of the key tactics of fraud promoters. This is the reason they strategically target groupings of people like church membership, sports fraternities, professional bodies etc. It is no wonder that people like Pastor Mark Kigozi are thriving with this D9 arrangement. Having a large fellowship of believers who outrightly believe in every word he mentions (fully convinced that it is the Holy Spirit at work), renders the success rate in such a congregation much higher.
  12. Diverting attention. When an investment scheme focuses more on gifts that success offers eg promoting a high life, good cars, opulence among others then only part of the story is being told.

I firmly believe that if your investment opportunity checks out with at least three of the issues I have shared here, then it’s time to rethink. Seriously!!!

I know poverty or the lack of money is making many of us gullible to the nearest offer of hope to become the next millionaire but do not forget that true wealth comes from working diligently.

King Solomon had the following to say about wealth:

Proverbs 12:11– “Whoever works his land will have plenty of bread, but he who follows worthless pursuits lacks sense.”

We all have land that God has given us. That land comes in the form of skills, talent among others. He wants us to utilise it as opposed to running around like headless chicken looking for the next big thing that someone else is introducing.

Proverbs 21:5- “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

A diligent person is one who works hard, is careful and thorough. Surely, does this scripture rhyme with those get rich quick 100% guarantee schemes? Youmay not be a Bible believer but one thing you cannot deny is the wisdom its scripture offers us.

Finally, DO NOT BE DECEIVED by spiritual leaders, apparently wealthy admirers of yours, family members or anyone that tries to get you into subscribing to something that has all the hallmarks of a scam. Keep that money of yours. It could be put to better use.

I hope I’ve saved someone.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda.

Follow @wirejames on Twitter

Email lunghabo [at] gmail [dot] com

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Good African Coffee Closure. Is Uganda’s economy on Auto Pilot?

Posted on April 25, 2017 | 3 comments

Andrew Rugasira is no saint, however one thing I can authoritatively say about him is that he is a resilient entrepreneur who always turns ashes into beauty. Many years back, I recall him running a prominent promotions company called VR Promotions which bit the dust. He was humble enough to go into hibernation only to re-emerge a couple of years later with Good African Coffee.

When I bought the newspapers of the 25th of April 2017, I was taken back upon reading a story about how the tax man had closed down his business for tax arrears of UGX 1.2 Billion.

On the 23rd of April 2017, Ian Ortega posted a mind opening article on Facebook in which among others he stated, “… We pride in building mansions in our villages in a sea of mud and wattle houses. And in the end we pay for it with insecurity, with deaths. It makes no sense to have majority poor and few rich. It always backfires… Start doing something to make sure the economy works for everyone regardless of their field. Let it work for a musician, for an artist, for an engineer, for the teacher etc. That is how you build sustainable societies.”

Having interacted one on one with Mr Rugasira a year back, I got to know quite abit about his ethos. While he is a hard nosed businessman, his passion for equitable growth and development is worth admiring.

Businesses close for various reasons and their closure has varying impacts on the economy. There are businesses whose closure will largely cause ripples among a few selected elites (who tend to be the noise makers) while others have the Fall Army Worm effect of distorting the bottom of the pyramid poor.

According to the New Vision, Good African Coffee has a network of more than 14,000 coffee farmers and has facilitated the set up of 17 (Seventeen savings and credit organisations) for these farming communities. The average household in Uganda has 5 members. This implies that if each coffee farmer is equivalent to one household, then the direct impact of his investment at this micro level has a reach of at least 70,000 people. Considering that in Uganda, it’s part of our culture for a household head to help various extended family members especially economically, we can safely assume that each farmer has an impact on 10 (ten) people in the extended family bracket. This implies that upto 140,000 people indirectly benefit from Good African as a result. On average we can safely state that at least 200,000 people from the coffee growing region are beneficiaries.

The New Vision further stated that the Good African products are available in over 700 UK Supermarkets as well as 500 stores in Africa. As a supermarket patron, I have come to learn that products on those shelves serve not only the purpose of consumer consumption but also national branding. How many people today in the UK swear by Good African Coffee? Judging by the inquisitive nature of today’s shopper, chances are high many have got to learn more about Uganda in the process. What better marketing for our nation?

While I am inclined to believe that management issues have definitely contributed to the status-quo, it’s quite sad that the tax man would be left to execute such a closure without proper appreciation of its wider implications. The Uganda Revenue Authority is not to blame since it is merely an execution agency tasked with collecting revenue for the Government. However, with all the tax breaks we keep hearing being directed to questionable foreign investors, why would a legitimately Ugandan owned and home grown business fail to be extended help? We just heard about the planned UGX 77 Billion tax relief that a number of companies whose list is led by the Sudanese owned AYA Group of Companies are likely to get. In my view, the footprint Good African Coffee has is much wider than AYA and any of those companies on the bail out list yet above all it impacts the lowly farmer whose sole hope for survival is farming.

We always hear of decisions being made in National Interest and this is what Hon. David Bahati, the State Minister of Finance for Planning emphasised while meeting Parliamentarians over the AYA bail out. Why was Good African overlooked?

  • Is it because the latter promotes the well being of peasants and there is this general fear among the political elite of genuinely empowering them?

  • Could it be that Rugasira doesn’t have the right brokers to argue out his case before the high and mighty in the Ministry of Finance?

We have been led to believe that overnight business moguls who set up with Shopping malls out of the blue are the ones that deserve respect and propping in order to keep our economy afloat but if we do not babysit the Rugasiras of Uganda and ensure that their businesses succeed at all costs, we shall continue in the cyclic rat race characterised by chronic poverty. Government should sit down Andrew Rugasira, make it clear to him that the success of his business is a national priority and could even have security implications considering that a large section of the farmers are from the already troubled Rwenzori region who might perceive matters differently. The riot act should be read out to him before working out bail out terms and conditions.

PS: In case you are comfortably employed with a regular salary and high flying MBA, you might have a problem appreciating the challenges genuine entrepreneurs go through in this Ugandan economy of ours. One day though, I hope you will be around long enough to appreciate what goes on the other side of the bridge.

I say, Bail Out the Brother !!!!!!

[UPDATE: Two days after publishing this aricle, Good African Coffee was reopened. I thank the authorities for having exercised a sense of sobriety. Now the ball is in Rugasira’s court to ensure he complies as required. ]

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter.

Email lunghabo [at] gmail [dot] com

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