The Financial Sector Conduct Authority (FSCA) has warned South Africans against dealing with Livestock Wealth and Livestock Financial Services as they may be unlawfully offering members of the public investment into livestock and agricultural products.
Livestock Wealth is a South African-based crowdfunding company founded in 2015 by Ntuthuko Shezi, who is still the company’s CEO.
The company connects investors with farmers who require funding by using cattle as a form of investment.
For example, options include the purchase of grass-fed beef cattle, a pregnant cow, a calf or the shared purchase of a calf. Options extend to owning a piece of farmland and individual macadamia nut trees.
Investments in various agricultural assets vary between R2,000 and R18,730, with maturity ranging from six months to six years.
“Buy & own real living, breathing, farm assets which are matured by farmers and then sold for guaranteed profits,” Livestock Wealth’s website says.
The company is headquartered in Johannesburg and has several farms in its portfolio based in Free State and KwaZulu Natal.
Livestock Wealth has also had its praises sung by the global media, including CNN and the BBC. Nedbank Private Wealth also hosted an interview with Shezi on their YouTube channel as part of its “What story will your money tell?” series.
In 2019, the ‘crowd farming’ venture secured financial backing from Rand Merchant Investment Holdings and has started supplying retail giant Woolworths with free-range beef.
On Wednesday, the FSCA issued a warning and said that Livestock Wealth may be unlawfully offering members of the public investment services.
The regulator made clear in a press statement that Livestock Wealth is not authorised to render any financial services to members of the public.
Gerhard van Deventer, head of enforcement at the FSCA, explained that Livestock Wealth had been using the financial services provider (FSP) licence granted to Livestock Financial Services to conduct its business.
This licence was granted only for the provision of insurance services and pension funds.
“There is a little bit of confusion and rolling into one in terms of the offerings, and that is a big problem as you have to have a licence to conduct financial services, and Livestock Wealth does not have a licence with the FSCA,” Van Deventer told 702.
Following it coming to the FSCA’s attention that Livestock Wealth was using Livestock Financial Services’ FSP number, an investigation was launched into the company.
Van Deventer said the investigation is nearly completed and a statement should be made in the next month regarding the outcome.
He said the investigation does include how Livestock Wealth invests the public’s money and whether the returns it generated are real or not.
CEO Shezi noted that Livestock Wealth will clarify its position in a statement it plans to release on Thursday. The statement was not released on the company’s website at the time of publication.