Ponzi schemes in Lesotho The name Ponzi came about after one Charles Ponzi duped consumers in New England in the United States of America. This infamous chiseller promised to give consumers an interest of 50% while the interest rate at the time was 5%.The most important thing about Ponzi or otherwise known as pyramid schemes is that they do not invest the money anywhere to generate this return. It comes from new members and old members leverage on the number of new entrants. MKM operated under the radar of the Central Bank of Lesotho (CBL). We can ignore the fact that CBL does not benchmark interest rates like other well-functioning central banks and take an average interest rate of 10.4% in 2007 the year in which MKM was closed. The return on investment at that time for consumers of MKM was 60%. When were compare the two things we realise that there is a huge difference in the returns and one begins to wonder where Mr Lebuajoang Thebe-ea-khale invested the money. It is now 6 years since the CBL intervened in the MKM saga and Mr Thebe-ea-khale remains a free man. Basotho were duped over M400 million and there is no single person or institution that has been held accountable for failure to protect consumers in Lesotho. Bernard Madoff is serving 150 year in prison after being found guilty of duping consumers in the US. When will our authorities act? Potso eaka ho lona ke hore na ha le kopana le ntho e tje leka e tseba le hona hore re tsereletse Basotho hore ba ske ba jooa sehloho?
Posted on: Mon, 25 Aug 2014 13:28:28 +0000
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