FINCLUSION GROUP LIMITED
STAFF WRITER | Friday October 4, 2024 15:46
FINCLUSION GROUP LIMITED STATEMENT OF FACTCONCERNING ALLEGATIONS MADE IN THE WEEKEND POST EDITION OF 14 SEPTEMBER 2024
Background:
1. Finclusion Group Limited (“Fin“) has noted with concern a recent press release (“the release”) in the Weekend Post newspaper edition of 14 September 2024, on pages 12, 13, and 14.
2. It is important to highlight that this was a paid press release, a fact which may have been overlooked by some readers.
3. In the release, it was alleged that Fin acquired high-performing assets from MyBucks S.A. (“MyBucks”) under the guise of offloading non-core assets in South Africa, Eswatini, Namibia, Kenya, Australia, Tanzania, resulting in personal benefit for Fin and it’s Co-Founder and Co-Ceo. Mr Timothy Nuy.
4. In making these allegations, a forensic report apparently prepared by Cliffe Dekker Hofmeyr (“CDH”) was referenced.
5. Given the libellous nature of the contents of the release, the Weekend Post should not have published the said accusations without validating the facts and/or asking us for comments.
The CDH Forensic Report:
6. With regards to the forensic report that was issued by CDH:
a. Representatives of CDH never reached out to anyone at Fin and only spoke to selective former representatives of MyBucks, specifically excluding all parties that would have had material knowledge of the transaction entered into between Fin and MyBucks.
b. The CDH report, as reflected in the release, does not conduct an analysis of how funds flowed amongst the various parties which it refers to, which is a fundamental flaw in the forensic report, and also creates room for the development of a false narrative.
c. CDH as a law firm has previously acted for MyBucks, specifically its South African subsidiaries assisting with selected employment law matters and the voluntary liquidation of VSS Financial Services (Pty) Limited, and as such, there is a conflict of interest that was not addressed upfront.
Fin’s response:
7. All of the defamatory allegations made in the release are false.
8. Fin wishes to clarify the facts given that this matter is in the public interest:
8.1 On October 30th, 2018, MyBucks published its Audited Financial Statements for the year ending 30 June 2018, reporting a loss of EUR9.5m, with PwC Luxembourg drawing attention to a Material Uncertainty Related to Going Concern. Subsequently, PwC Luxembourg concluded an audit of MyBucks as at 30 June 2019 reporting a negative equity of EUR42.9 with liabilities of c. EUR249.9m.
8.2 In order to salvage MyBucks from bankruptcy, the company’s largest lenders agreed to a restructuring of their debt and convert c. EUR53.4m of debt into equity and an extension of terms on other financing liabilities. Within this conversion, c. EUR28m was to be converted by Ecsponent Limited (“Ecsponent”) and its subsidiaries, which would make Ecsponent the controlling shareholder in MyBucks.
8.3 Ecsponent required South African Reserve Bank approval (“SARB”) for the conversion of debt. SARB declined as the transaction would result in a South African company (Ecsponent), owning a major stake in a Luxembourg company (MyBucks) which owned another South African company (GetBucks South Africa) commonly referred to as a loop structure. SARB directed Ecsponent to resolve such loop structure as a condition to approve the transaction.
8.4 The Board of MyBucks decided it was in its best interest after assessing multiple options to dispose of GetBucks Kenya and GetBucks South Africa to Fin as the only viable option to resolve the loop structure and comply with SARB regulation. In the execution of the acquisitions, Mr. Timothy Nuy (as a Director of MyBucks) recused himself from voting on the disposals made by MyBucks Group, and all conflict of interest disclosures were made accordingly.
8.5 Fin specifically agreed to acquire Emyu-Enya Enterprises Limited (“Getbucks Kenya”) and Get Bucks (Proprietary) Limited (“Getbucks South Africa”), which was also the 100% owner of Ligagu Proprietary Limited trading as Getbucks Eswatini, the 100% owner of GetSure (Pty) Limited, and the 49% owner of GetBucks Namibia (Pty) Limited at that time from MyBucks, on or about 22nd of October 2019.
8.6 GetBucks Kenya lost KES51.7m (c. -EUR445k) for the period leading up to 31 December 2019 and GetBucks South Africa lost ZAR41.6m (c. -EUR2.6m) for the period leading up to 31 December 2019 and ZAR257m (c. – EUR18.2m) for the period leading up to 30 June 2019. Whilst the turnaround of the Kenya business progressed positively, the South African business has continued to struggle and Fin has pivoted in that market and is currently winding down the legacy lending operations that it acquired from MyBucks S.A.
8.7 MyBucks was able to sell its entire holdings in MyBucks Australia (Pty) Limited to Skybound Capital, and not Fin as incorrectly reported in the release, for a total of AU$11.6m (EUR7.1m), by 31 December 2019. Fin never owned any shares in MyBucks Australia.
9. We would kindly ask the public