SA watchdog warns against Chinese scheme that uses glitzy events to target locals

SA's financial watchdog has warned the public against doing business with QZ Asset Management, a Chinese multi-level marketing scheme that hosted lavish investment drives at upmarket Johannesburg and Durban hotels.

The Financial Sector Conduct Authority (FSCA) said that it had received numerous complaints from the group's clients that they had been unable to withdraw funds after QZ Asset Management's website went offline.

"The FSCA can confirm that QZ Asset Management is not authorised or registered under any legislation administered by the FSCA or Prudential Authority," it said.

The watchdog added it had launched an investigation into the scheme.

Over 3 500 people have also signed an online petition criticising the group and its directors for "maliciously defrauding their investors".

Social media posts show QZ Asset Management holding events where local promoters talked up the scheme, which claimed to be able to quadruple investments in a week.

"I am so blessed to be among leaders who are leading with transparency and integrity. They are not being shaken by any of the negative news [...] going around social media," states a promoter in a slick video published 10 days ago.

"Guys, this platform is super amazing. It has changed so many people's lives. With what is coming, we are definitely going to create a lot of multi-millionaires."

In addition to Johannesburg and Durban, News24 has seen fliers advertising QZ events in Soshanguve, Bethlehem, Ivory Park and Phalaborwa.

An archived version of QZ Asset Management's website states that the group was headquartered in Guangzhou, China.

It claimed to use "big data and artificial intelligence" to make automated invested decisions that beat the market.

On social media, it promised investors returns of 400% per week from investments starting at around R2 000.  

The group also alleged that successful investors would be able to earn everything from "Ferrari supercars" to Hermes bags and stays in luxury hotels as rewards as part of a "recognition programme".

The group's social media feed includes a letter from its CEO, Blake Yeung, promising to visit South African In June and open 3 000 square foot office in Johannesburg.

The group also said it would be filing to list on the NY Stock Exchange and urged members to buy shares at $2 (R40) ahead of the listing.

QZ Asset Management did not immediately reply to a request for comment.