At the end of 2008, it became clear that investors had lost all their money invested in Edwafin. The company has been liquidated and R228 million has been lost. Are those who perpetrated this evil are regrouping to pounce on unsuspecting investors again? This blog will expose those who are responsible for the demise of Edwafin. The principle players are Patrick Stapleton, Don Hutchinson, Carole Gardiner, and Rob Klijnsmith
Yesterday I described how the investors received a letter from Mr Patrick Stapleton, in which he explained the woes of the computer. Again the computer presented problems and they had to write out 4000 cheques. The month of November and December had been combined to prevent writer's cramp with the staff. Mt Stapleton also wishes us a very happy festive period. Mr Stapleton is a very nice man, and the following picture shows him to be rather a congenial person:
However, I was not happy and wrote a letter to him on 9 December 2008, stating this fact, whilst also mentioning that I was quite aware of the "Default Event" clause: Non Payment of Interest 20081209
Although I don't think that I was the only person who had approached and reproached Mr Stapleton, he nevertheless responded speedily in a friendly and informative way. He assured me that the problem was purely computer related and that Edwafin had made a big profit and that there was no problem. This is his email of 10 December 2008: 20081210 Email From Stapleton
Today was a madhouse, and the things that I wanted to do had to be left aside. On Tuesday I mentioned that there was a clause in EDWAFIN's prospectuses, that states that they have to return the investment funds if they defaulted on their obligations. Unfortunately, I only had access to paraphrased versions of the clause as they were published in the glossy brochures. That is not ideal and the attorney handling the matter for me, also needed an original copy. Thus I set out trying to obtain copies of the respective prospectuses. What I thought would be easy, was not so easy at all. Yes, I know - freedom of information, and so on, but reality is different. First, I tried the obvious people: EDWAFIN. "No,I could not get a copy but was welcome to peruse it on their premises in Durban" (600km from where I live). I remember so well the day when we signed up and the agent promised us a copy of the prospectus and the regular financial statements (this is also specified in the prospectus). The good old days. The next logical place was the DTI, or more correctly its subdivision, CIPRO. First I was told that only accounts could apply, then I was told that I could get the documents over the internet - neither worked. But today I received them in the mail, compliments of CIPRO. Four hefty envelopes filled with assorted documents. Nevertheless, after an hours sorting we finally have copies of the two prospectuses that pertain to my debentures. As soon as this site is open to the public, I will give more details about the documents and how you can obtain copies of my versions. The upshot is that my attorney is now happy (important), and that I have a literal version of the clauses concerned. See below (please give the Scribd engine time to load - at the time of writing this there seemed to be a problem with the images. A readable copy of this document may be downloaded by following the links at the bottom):
End of October 2008 The first signs of trouble began already with the interest payment that was due at the end of October 2008. It came late. The money was sent to us by cheque and was dated 4 November 2008 - four days after the end of the month. By the time the cheque had been cleared by the banks, it was at least 10 November before the interest money could be accessed.
The reason for the delay in payment, EDWAFIN said was that they had implemented a new computer database earlier during 2008, to manage the EFTs more efficiently. Unfortunately, the database, had left them in the lurch and they had to sign 4000 cheques by hand. That is fair enough, for those of us who work with computers this is normal for the course (even if such a program costs millions? A letter dated 15 May 2008 informed the investors of the new database, this was followed by a letter of 2 October concerning the commissioning of the database).
Then came the end of November 2008 A letter of 28 November informed the investors why that month's would only be paid by the 15th of December 2008 together with the December interest. Caveat: the cheque (the database was still not operational, and thus EFTs could not be done) was postdated to 15 December. An extra 1% was added for administrative costs, etc. The cheque could also not be cashed over the counter, obviously covering the company legally in case things would go wrong.
This was rather irritating and inconvenient seeing that it was the end of the year. But, hey, things happen in life and one has to accept these situations when they can't be changed. However, notice the last paragraph of the letter below. I feel the urge to repeat it here in view of what was to happen:
I trust that you all have a wonderful festive season. Remember that you have invested into a very good company, with a high reputation.
Yesterday, after I posted the first two blog items, I wrote an email to Mr Patrick Stapleton, the CEO of EDWAFIN as well as the Group Legal Manager, Ms Verona Cowan.
I informed Mr Stapleton and Ms Cowan about this blog page, but that I would wait with full publication until the coming weekend. This would give them the time to respond but also give me the opportunity to bring the most important aspects of the content up to date. The content of the email is shown here (right-click to zoom in): 20090223 Email From MK
Read all about EDWAFIN's sphere of activities and the head honchos running the business by clicking on this logo. For comment on the legality of using a company's logo in a blog see Blogcoach and Intellectual Property
About two and a half years ago, an investment opportunity was brought under our attention via the Internet. The company that advertises the investment opportunity, EDWAFIN, has a classy image, great prospects, and lofty plans for the future. They provided extensive, glossy reading material and generally impressed my wife and myself with their reports of success. Viewers can go and look at their main site at www.edwafin.com where a number of links to subsidiary companies can also be found. More important for us as prospective investors was that they offered a whopping 15% interest per year - obviously a very attractive proposition.
The investment takes the form of debentures that runs for just over 5 years (63 months), after which the invested funds would then be returned. Investors have the choice of receiving the interest earned on the capital amount, at the end of every month or to receive the whole lot at the end of the investment period, thus receiving about double their invested capital after five odd years. Furthermore, to make their offer more attractive the representatives who visited my wife and me were very likable persons, made an excellent impression and contributed to the increase in our overall confidence we had in the company. The deal breaker was that we were offered an additional 3% interest per year: that is a total of 18% interest per year. There was even a further caveat to the offer: although one could not recall your money before the end of the 63 months, there is a clause in the prospectus (there are about 10 or more currently published) that states that if EDWAFIN defaulted on their interest payment, and did not pay such interests before or on the 15th of the following month, the full invested capital is refundable after 30 days. Enticing isn't it? My wife and I thought so, and promptly invested an amount of money with EDWAFIN, and a few months later we invested a second, equal amount of money.
For two and half years we received our monthly interest payments always on time and mostly a good week or more before the end of the month. That impressed us no end, and eradicated the slight fear that some commentators tried to instill in investors about the unrealistically high interest rates.
Then November 2008 came.
This is where the story really begins and during the following days I shall tell the tale as it were in short but intriguing snatches.
Read here all about my investment with EDWAFIN, and the attempts to bring it all to a conclusion after it went pear shaped.
Originally Mr Stapleton, the CEO of Edwafin, had an agreement that this blog would not be published before 31 May 2009, and that it would be removed after I had received my money by that date.
Recent events (end of March 2009) have convinced me that there is total lack of sincerity on the side of Edwafin (and most probably Stapleton himself), as he had no problem in subjugating a retired lady to his whims and contrary to any prior written agreements. She is not the only one in this predicament, but is an example for us all.
There is also a group/forum http://groups.google.com/group/edwafinforum as well as on facebook at http://groups.to/edwafingroup, should you be interested in participating in the debate and possible collective legal action against Edwafin and its Management..
After years as a musician and academic, I have come to realize that one need not only have a single career. So I'm working on a second one, and it is all very exciting.
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