Botswana’s Financial Regulators and Law Enforcement Agencies Crack Down on Illegitimate Deposit-Taking Activities and Unlicensed Investment Vehicles
The following article outlines an ongoing investigation into potential pyramid schemes and unlicensed investment vehicles in Botswana that have been involved in unfair and fraudulent trading practices.
Investigations into Pyramid Schemes and Unlicensed Investment Vehicles
The Bank of Botswana (BoB), the Competition and Consumer Authority (CCA), and law enforcement agencies have launched investigations into suspected pyramid schemes or similar investment vehicles operating in Botswana.
- Ecoplexus Solar Equipment (Pty) Ltd is under investigation for engaging in unfair and fraudulent trading practices, and is NOT licensed or authorized by the Bank of Botswana or the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) to undertake banking or financial services in Botswana.
Unlawfulness of Pyramid Schemes and Unlicensed Deposit-Taking
Pyramid schemes and other illegal deposit-taking activities, including ponzi schemes and fraudulent investment vehicles, are unlawful in Botswana. These activities contravene the Banking Act and the Consumer Protection Act.
The Banking Act
- The Banking Act restricts transacting banking business and advertising for or soliciting deposits of money solely to licensed banks.
- It is a criminal offense for any person to undertake or promote these activities in Botswana.
Penalties for Violating Banking Regulations
Any entity or person involved in illegal deposit-taking contravenes the Banking Act and is considered to be transacting the business of banking without a valid license issued by the Central Bank.
- Guilty parties face a fine of P2,500 per day for the offense and imprisonment for five years.
- Failure to comply with the Bank of Botswana’s order to cease and desist from such illegal operations renders the owners/promoters liable to a fine of P2,000.00 on each day the contravention occurs, in addition to three years in prison.
Public Advised Against Participation in Pyramid and Ponzi Schemes
The public is strongly advised to refrain from participating in pyramid or ponzi schemes, especially those offering “get-rich-quick” and unrealistically high returns in non-transparent, unlicensed investment vehicles.
Due Diligence Before Investing
The public is encouraged to exercise due diligence and establish the legitimacy of any business opportunity with relevant authorities before investing.
Contact Information
For further information, contact:
- Dr. Seamogano Mosanako, Head of Communications and Information Services
- Email: mosanakos@bob.bw
- Phone: +267 360 6083, 360 6382, or 360 6315
Bank of Botswana Website
Additional information may be obtained from the Bank of Botswana’s website.