Billionaire Douw Steyn’s 1Life Insurance is tricking pensioners into paying their social grant money into policies they neither need, want, nor can afford.

Every month insurance billionaire Douw Steyn’s 1Life snatches R110 in funeral insurance premiums from the social grants of each of 190,300 – mostly impoverished – South Africans. This captured monthly revenue delivers a guaranteed R250m-plus annual income, that pours, year after year, into the magnate’s corporate coffers.

Latitia Marinara (left) and her mother, Sanna

Pensioner Mrs Sanna Marinana 73, and her disabled 40-year-old daughter Latitia never wanted their funeral policies with 1Life in the first place. For six years they’d been paying R65 per month each into perfectly good ones with Doves. But 1Life’s agent would brook no argument: “She said she’d been sent by SASSA and all people who get social grants and pensions must take the policy,” recalls Mrs Marinana. “We thought all the people on grants had to do it and we didn’t want to get into trouble by refusing.”

It was in November 2013 that 1Life’s bluntly demanding agent knocked at their door in Khayalethu South, part of Nekkies township outside the Garden Route tourist town of Knysna. And ever since 1Life has been drawing R110 per month from each of the mother and daughter’s SASSA grants. In the last four years Douw Steyn’s long term life insurer has made deductions totalling R10,560 for funeral policies that Mrs Marinana and Latitia hadn’t asked for, didn’t want – and couldn’t stop.

1Life lies within the long term insurance arm of Steyn’s Telesure Group, whose chairman is Douw Steyn’s long-serving second in command Stephen Klinkert. Telesure houses Steyn’s South African  interests that include Auto & General, Budget Insurance, Dial Direct and Hippo, as well as his property holdings: Steyn City, The Saxon boutique hotel in Joburg’s Sandhurst and Steyn’s Shambala private game reserve in the Waterberg.

Mrs Marinana, a widow since her gardener husband died 11 years ago, is a respected elder at Pastor Vubu’s church and lives a quiet life with Latitia in their trim RDP house in Khayalethu South. Since Latitia was a baby she has suffered from hydrocephalus – water on the brain – and following neurosurgery at Groote Schuur hospital in Cape Town when she was 19 she has received a permanent disability grant.

Mother and disabled daughter pool their R1,610pm grants, which just about meets their food costs. They have no other source of income, so maintaining payments of R110pm apiece to 1Life for four years to keep SASSA happy, as they thought, has been a major sacrifice.

The Marinanas are not alone. Colleen Ryan, Black Sash’s regional manager in the Western Cape, tells Noseweek that on her visits to advice centres across the province she is besieged by pensioners battling unsuccessfully to cancel unwanted 1Life funeral policies. Many of these, like the Marinanas, were hooked by 1Life’s commission-hungry agents with the line that they were from SASSA and the policies were compulsory.

Black Sash took up the cudgels for 18 1Life victims in Franschhoek. “Then we had 45 cases which took over a year to cancel,” says Colleen Ryan. “Since then I’ve been working on 10 more. It’s disgraceful. When you see the poverty on the ground, when you know how these people could use that R110 to buy 11 loaves of bread. The pensioners we’re helping in Mossel Bay already had funeral polices with funeral brokers they knew.”

The Financial Services Board is investigating Black Sash’s claims of misrepresentation by 1Life’s agents. The board has called for affidavits for the 10 latest cases, which are in Mossel Bay, Beaufort West, Oudtshoorn and Paarl. Highlights from these:

Cylia Nteyi, aged 90, from Beaufort West: “I was given a policy by 1Life without my consent in 2016. I tried to cancel it but it never stopped. It’s still deducting from my SASSA card.”

John Petrus Campell, aged 81, of Mossel Bay: “An agent from 1Life came to my house and said she was from SASSA and told me I must take a policy. When I asked her who pays for this policy she said it’s the state. I then noticed the money coming off from my SASSA card. I went to Child Welfare in Mossel Bay to ask for help. They asked Black Sash to assist and on 19 March 2016 it was cancelled. To date I have not received my refunds.”

Mona Brinkhuis, aged 76, from Mossel Bay: “Two agents from 1Life came to my house and said they were from SASSA and that I must take a policy. I went to Child Welfare in Mossel Bay and tried to cancel it. I signed an affidavit on 3 March 2016. The policy is still being deducted.”

Somza Norman Tsolo, aged 68, of Wellington: “Since January 2015 they are deducting money from my SASSA card. I didn’t apply for this policy. I never signed any policy with 1Life. I need my money back.”

Novakalisa Kahlana, aged 64, of Paarl: “I want to cancel the stop order for a 1Life funeral policy which is deducting R130 from my SASSA card every month. I never joined any policy. I need my money.”

As for Mrs Marinana and Latitia in Khayalethu South, at their request Noseweek entered the fray and on May 25 this year we sent a letter by registered post, on their behalf, to 1Life’s compliance officer, terminating both policies with immediate effect and withdrawing mother and daughter’s authority allowing 1Life to deduct premiums from their social grants. This letter was not even acknowledged. For five months the R110 deductions continued, until Noseweek escalated the complaint to the office of Laurence Hillman, chief executive of Telesure’s long-term insurance business.

Within days Hillman was assuring us that both Mrs Marinana’s and Latitia’s funeral polices had now been cancelled “and we have refunded all premiums received since the cancellation request of 25 May, and compensated them for interest lost and bank charges incurred due to this incident”. This grand gesture came to R700.40 each for mother and daughter.

Hillman added: “It is important to note that we are committed to processing all cancellation requests in less than two working days of being received. With regard to Mrs Marinana and her daughter’s policy, we can confirm that this was an administrative oversight and we are undertaking a full review to determine why the process failed in this instance, and why the policy was not cancelled when the instruction was received.”

Well, it is clear from the complaints gathered by Black Sash that 1Life policies are not all processed within two working days. As for their agents’ lies, claiming to represent SASSA and that 1Life’s funeral policies were compulsory, Hillman places the blame squarely on the shoulder of those agents, independent financial service providers Emerald Wealth. “They are not part of 1Life and are liable for the advice that they offer as well as the manner in which they sell their products,” maintains Hillman. He adds: “Emerald Wealth are no longer contracted to enter into any new policy sales on behalf of 1Life.”

UK empire running on R7bn debt facilities

The other day a vuvuzela-blasting convoy of trucks rolled into the sprawling Midrand township of Diepsloot bearing Santa Claus and Yuletide gifts for 12,000 primary school children. Each child received a schoolbag, stuffed with toys, sweets and stationery, a Yuletide gesture from their billionaire neighbour Douw Steyn, who’s building his very own state-of-the-art Steyn City next door.

Giuseppe Plumari helps to hand out school bags to the children in Diepsloot

So far the Auto & General founder has pumped more than R6.5bn into his Steyn City dream, shrugging off criticism that it perpetuates an apartheid notion and undermines Johannesburg’s “spatial fabric”. Property and site sales, launched in March 2015, have reached R1.7bn, and 400 residents are now installed in easy-living apartments and luxurious clusters. The idea is that the mogul’s private city, which could cost a staggering R50bn, will be self-financing through sales over the next 12-15 years.

The annual schoolbag distribution is a useful image-polisher for the oft-controversial Steyn, who shared the R3m cost of the Christmas spectacular with sponsors who supplied most of the bags’ contents. And the PR pays off. When Economic Freedom Fighter leader Julius Malema urged the township residents to march in protest at this white man’s invasion of 800 African hectares, they flatly refused, saying: “Not this man, he’s part of us.”

Steyn City Properties chief executive Giuseppe Plumari tells Noseweek that after a bumper first year property and site sales have slowed due to political instability and dwindling consumer confidence. So may Douw Steyn have to pay a big chunk of the R50bn final cost himself? Well, there are some shadows on the horizon.

On the face of it, the insurance mogul’s pockets are bottomless despite his legendary squanderings. In May he was ranked 152nd in the latest Sunday Times Rich List of Britain’s wealthiest, with a UK net worth of £850m (R15.7bn).

Aerial view of Steyn City

His home in Steyn City, the sumptuous Palazzo Steyn, is valued at R250m. His 10-bedroomed mansion in London’s Belgravia cost £62m (R1.1bn). In September he picked up the lion’s share of a £138m (R2.5bn) dividend from his UK insurance and financial services BGL Group (Steyn and the Enthoven family, who own Nando’s, hold 92% of the stock between them). Their previous year’s payout was a more modest £59.3m (R1bn-plus). These jaw-dropping numbers just go on and on.

The massive dividend award, though, is surprising. For although BGL’s consolidated revenue for the year to June was 12% up at £585.2m, with a pre-tax profit of £122m, current group net liabilities at year end were running at £65.1m and liquidity was only preserved by going into hock for £410m (around R7bn) with the bank through an unsecured £210m revolving credit facility (£117m of which was  swallowed up by June) and a £200m securitisation facility (£35m already drawn). Both facilities mature in March 2019.

Steyn’s board planned to resolve the liquidity problem – and in the process give BGL’s founder and principal shareholder Douw Steyn another dollop of millions to complete Steyn City – by floating BGL Group on the London Stock Exchange. Scheduled for 2017, the listing has now been put on the back burner after the UK media revealed that the group’s best earner, its price comparison website comparethemarket.com, is under investigation by the Competition and Markets Authority, the UK’s competition watchdog.

The authority’s probe follows concerns that comparethemarket.com website, first choice for 5.1m customers in the UK thanks to its famous talking meerkats TV ads, may have done deals with insurers that forced up customers’ premiums and could be in breach of competition law.

Palazzo Steyn, Douw Steyn's 3,000m² residence in the luxury development

Disturbing though the listing hold-up is, Douw Steyn’s perennial cash cow remains BGL’s Guernsey-registered parent company BHL Holdings, whose own offshore ownership trail winds through Reef Holdings to something called The Concrete Trust, for whom the Reef Foundation acts as trustee. It’s BHL Holdings that’s pumping all these billions into Steyn City, through its local Telesure Investment Holdings. The financial statements of BHL Holdings and the offshore daisy chain, naturally, are not for public consumption.

An irritant that continues to plague Douw Steyn, who celebrates his 65th birthday on December 19, is the ongoing high court battle initiated by his former fiancée Donné Botha, who seeks the court’s ruling that she and Steyn were legally married in London in 2007. Steyn claims there was only a “blessing ceremony”. Donné, who has already sought R30m in settlement of her claim, has been described by Steyn’s attorney as gold-digger. However, should she be successful in Durban High Court, Steyn could lose up to half his fortune – and his subsequent remarriage to actress Carolyn Steyn would be declared invalid.

Donné’s turbulent relationship with Douw Steyn has been exhaustively chronicled in Noseweek (noses106; 107;  109; 111; 114) including a memorable account (nose111) of Steyn’s 2009 subpoened appearance at Wynberg regional court (Gauteng). Donné was in the dock, facing an attempted murder charge for her attack on Sicilian Bianca Ferrante with a champagne bottle, after surprising the beauty in bed with Steyn at his Saxon boutique hotel. (She was found guilty of assault with intent to commit grievous bodily harm and fined R3,000 or 12 months imprisonment suspended for three years).

But in court it was Steyn who commanded attention. After a vodka-fuelled display of incoherence in the witness box he stepped down to take a wild swing at Bianca’s attorney Ian Levitt; on court premises he slashed the legs off the trousers of his Armani suit at the knee; he abandoned socks and shoes and mesmerised magistrate Renier Boshoff and prosecutor Adele Barnard by enveloping them in a bear-hug, pleading: “Can I give you some money?” The charade ended with a bodyguard racing Fawlty Towers-style through the court with an armful of pink champagne bottles to cheer up the boss with a courtroom party.

These days, Carolyn Steyn is a bedrock to the mercurial Steyn. Their first marriage in 2003 lasted just five months and they remarried in 2013. “He’s a very difficult man, not easy,” admitted Carolyn in a radio interview several months ago. “I could never get him out of my system – and I tried so hard! He’s a fascinating man, a visionary. Douw has taught me a lot of things, and one is: go big or go home.”

Mrs Steyn is a full-time charity worker, prison visitor and founder of 67 Blankets for Mandela Day, and in the past three years has distributed 30,000 blankets, hand-crocheted by volunteers, from prisoners to school children, to the needy. So has this remarkable woman calmed Douw Steyn down a bit?  “We do not comment on personal matters relating to Mr Steyn, nor shall we comment on commercially confidential matters or business affairs of Mr Steyn,” replies Steyn’s PA, Jonathan Butt. 

Steyn City chief executive Giuseppe Plumari tells Noseweek: “Steyn City is running independent of Mr Steyn by a board which oversees its operations and fiscal policy.” Latest initiative to go on stream, says Plumari, is the Steyn City Foundation, a multi-million rand upliftment project with as-yet undefined priorities. Although the foundation will carry Douw Steyn’s name, the canny billionaire won’t be contributing a cent – funding will come from a 0.5% levy on the price of incoming residents’ property purchases. 

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