The unravelling of the Louis Group of property companies in Europe – and South Africa – has been long in the process, although the company succeeded miraculously in keeping the bad news from its unfortunate investors for more than a year.
Only now have they learned that after a year-long investigation by its inspectors, the Financial Services Board on 19 September 2011 gave notice that it was withdrawing Louis Group SA Ltd’s (LGSA) authorisation to act as a financial services provider.
|Alan Louis International Group CEO of the Louis Group|
At the same time the FSB gave notice that it was debarring 12 Louis Group directors from “rendering any financial services to clients, whether directly or on behalf of any authorised financial services provider in terms of Section 14 (a) of the Financial Advisory and Intermediary Services Act”.
However, exactly one month later, LGSA and the 12 debarred directors brought an application in the Western Cape High Court against the Registrar of Financial Services Providers, for an order reviewing and setting aside the FSB’s withdrawal of its licence and debarring of its directors.
For unknown reasons the FSB did not oppose the application and instead simply withdrew its September 2011 notices.
Almost immediately, one of the Louis Group’s investors, a trust called the Arts Foundation, issued summons out of the Western Cape High Court, seeking to recover its multimillion-rand investment, plus interest.
On the Isle of Man, where the financial authorities did act and closed down the Louis Group activities there in their entirety (nose158), elderly locals have lined up to tell the local newspaper, the Isle of Man Examiner, how they have lost their life savings, having been “missold” an investment in the Louis Group as a “low risk” investment.
Jane Taylor, who worked as a senior investment administrator for the Louis Group in the Isle of Man for two years, invested a total of £25,000.
She said: “They were my employer and I trusted them. I had worked in banking for 35 years and it was not sold as a high risk investment – it was promoted as having no element of risk. There was a Christian ethic. I was told there was no way I would lose my money. They must have known for a long time that things were going wrong.”
They clearly did. Early last year a Namibian citrus plantation owned by the Group, called Komsberg Farming, went into liquidation, without having paid its workers for some time.
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